PepsiCo Q3 Profit Climbs, Core Margin Down; Updates FY26 View; Stock Gains

(RTTNews) - Snack and beverage major PepsiCo, Inc. reported Thursday higher third-quarter profit and sales, while core operating margin dropped from last year. Further, the firm trimmed fiscal 2026 core earnings per share growth view, and updated revenue growth forecast.

In pre-market activity on Nasdaq, the shares were trading 2.16 percent higher, at $126.40, after closing Wednesday's regular trading 1.6 percent lower.

Chairman and CEO Ramon Laguarta stated, "Looking ahead, we remain focused on building upon the strength of the International business while acting with urgency to sustainably improve our performance in North America through more investments in innovation, effective brand building, and sharper marketplace execution by channel. Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation."

Looking ahead for fiscal 2026, PepsiCo now expects core earnings per share growth of 2.5 percent to 3.5 percent, compared to previous outlook at the low end of 5 percent to 7 percent growth range.

Net revenue is now projected to grow approximately 6 percent, compared with the prior guidance of a growth of 4 percent to 6 percent. Organic revenue is now expected to increase approximately 3 percent, revised from the previous range of a growth of 2 percent to 4 percent.

PepsiCo still expects to return $8.9 billion in cash to shareholders.

In the third quarter, net income attributable to PepsiCo reached $3.048 billion, up from $2.603 billion in the prior year period. Earnings per share increased 17 percent to $2.23 from $1.90 a year ago. Core earnings per share were $2.34, compared to $2.29 last year.

Operating profit climbed 19 percent year-over-year to $4.26 billion, and operating margin improved 195 basis points to 16.9 percent. Core operating profit grew 3 percent to $4.28 billion, while core operating margin dropped 35 basis points to 16.9 percent.

Net revenue increased 5.6 percent to $25.274 billion from $23.937 billion in the year-ago quarter. Organic revenue growth reached 3.1 percent.

In the quarter, Convenient Foods volume grew 1 percent with growth in Latin America and Asia Pacific regions, despite flat volume in North America and a drop in EMEA region. Beverages volume increased 3 percent with growth in International and EMEA regions, despite 2 percent drop in North America.

According to the firm, the positive results mainly reflected the scale and resilience of the international business, the ongoing evolution of the global portfolio and an improved presence in underpenetrated channels and occasions.

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