PepsiCo Q2 Profit Surges, Core Margin Drops, Confirms FY26 View; Stock Down

(RTTNews) - Snack and beverage giant PepsiCo, Inc. reported Thursday significantly higher profit for its second quarter mainly on sharply lower impairment charges, as well as increased net revenues and volume. Meanwhile, core operating margin declined from last year. Further, the firm maintained fiscal 2026 outlook for core earnings and sales growth.

In the early morning trading on Nasdaq, PepsiCo shares were losing around 4.41 percent, trading at $136.21.

Chairman and CEO, Ramon Laguarta, stated, "Looking ahead, we will continue to execute on our strategic priorities with a focus on accelerating top line growth - including the restaging of certain global brands, innovating with emerging, functional and permissible offerings and investing in certain affordability initiatives. We are also elevating productivity across the organization to improve operating leverage."

Looking ahead for fiscal 2026, the company continues to expect organic revenue to increase between 2 and 4 percent; and core constant currency earnings per share to increase between 4 and 6 percent.

On a reported basis, core earnings per share would grow around 5 to 7 percent in fiscal 2026, with net revenue growth within a range of 4 to 6 percent.

In the second quarter, net income attributable to PepsiCo increased significantly to $2.98 billion from $1.26 billion in the prior year. Earnings per share rose 137 percent to $2.18 from $0.92 last year.

Core earnings were $3.02 billion or $2.20 per share, compared to $2.91 billion or $2.12 last year.

Operating profit increased 125 percent and operating margin expanded 875 basis points year-over-year, reflecting prior-year impairment charges related to the Rockstar and Be & Cheery brands, and lower restructuring charges.

Core operating profit grew 4 percent to $4.07 billion from $3.91 billion a year ago. Meanwhile, core operating margin dropped 40 basis points to 16.8 percent from 17.2 percent a year ago.

The company's net revenue reached $24.18 billion, up 6.4 percent from $22.73 billion in the prior period. Organic revenue increased 2.4 percent. The company recorded strong organic volume and net revenue growth for the global convenient foods and global beverages businesses.

PepsiCo Foods North America revenues dropped 2 percent primarily reflecting lower effective net pricing, while all other segments recorded improved revenues.

PepsiCo Beverages North America revenues grew 7 percent primarily reflecting the benefits of acquisitions made in 2025 and organic growth.

The international businesses performed well with each segment delivering strong net revenue growth.

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