PepsiCo there was reported quarterly earnings and revenue that exceeded analysts’ expectations, backed by international growth as the North American business continues to lag.
With a quarter left in 2026, the company also lowered its forecast for full-year earnings, as struggles in the housing market weigh on profits. Pepsi expects core earnings per share to increase 2.5% to 3.5%, down from its previous projection of a lower range of 5% to 7%. It is also currently projecting net revenue growth 6%, at the high end of the previous outlook from a range of 4% to 6%.
Tune in at 10 a.m. ET as PepsiCo CEO Ramon Laguarta joins CNBC TV to discuss the company’s earnings. Watch in real time on CNBC+ or the CNBC Pro stream.
Pepsi shares rose about 2% in pre-market trading.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.34 adjusted vs $2.29 expected
- result: $25.27 billion vs $24.96 billion expected
Pepsi reported third-quarter net income for the company of $3.05 billion, or $2.23 per share, down from $2.6 billion, or $1.90 per share, a year earlier.
Excluding items, the company earned $2.34 per share.
net sales an increase of 5.6% to $25.27 billion. Organic revenue, which excludes acquisitions, divestitures and foreign exchange, rose 3.1% during the quarter.
Pepsi reported volume growth of 3% for beverages and 1% for food for the quarter. Volume excludes price and currency fluctuations to more accurately reflect demand.
The company’s international market is again a bright spot. Pepsi’s international business has contributed 41% of the company’s net revenue so far this year, CEO Ramon Laguarta said in prepared remarks.
Pepsi experienced volume growth in all but one international business unit during the quarter. Only the convenient food division in Europe, the Middle East and Africa reported a volume decrease, by 1%.
But in the home market, Pepsi is again struggling.
“Our business in North America performed below our expectations and represents a significant opportunity for improvement,” Laguarta said.
The North American beverage unit saw volume decline 2%, while the North American food division reported flat volume.
The turnaround of the domestic business was slower than expected, CFO Steve Schmitt said in prepared remarks. Until now, the strategy to fix the struggling division has focused on innovation and the company’s advertising and marketing.
For snacks, Pepsi has used simpler ingredients, “alternative” oils and functional benefits, such as protein and fiber. The beverage business will continue to focus on functional hydration, flavored beverages, energy drinks and zero sugar options.
However, Laguarta showed green shoots indicating that the company’s efforts are working.
Pepsi’s North American convenience foods business, which includes brands like Doritos and Quaker Oats, grew organic revenue sequentially. The North American beverage unit, which includes soda and Gatorade, among other brands, is seeing organic volume trends, thanks to functional hydration and zero sugar drinks. But Pepsi’s portfolio of carbonated soft drinks lags in the overall category, including its rivals Coca-cola.
Pepsi plans cost reductions to reduce redundancies and discretionary spending to pay for investments in innovation and marketing, Laguarta said in prepared remarks.