EquitiesMarket noteThursday 8 October 2026, 23:17
PepsiCo earnings: profit forecast cut as North America stalls
PepsiCo earnings: third-quarter revenue rose 5.6%, but PepsiCo cut its 2026 profit forecast as sales in North America stalled and input costs kept rising.
By The Notebook Desk
PepsiCo earnings grew in the third quarter, but the company cut its profit forecast for the year. Net revenue rose 5.6% to $25.27bn in the 12 weeks to 5 September, and earnings per share rose 17% to $2.23, PepsiCo reported on Thursday. Core earnings per share, the measure PepsiCo guides on, rose only 2%, to $2.34.
PepsiCo now expects core earnings per share to grow 2.5% to 3.5% this year. Before, it had pointed to the low end of 5% to 7%. Without the effect of currencies, it expects growth of 1% to 2%, down from the low end of 4% to 6%.
Where PepsiCo is growing, and where it is not
The split is between North America and the rest of the world. Organic revenue, which leaves out currency moves and deals, rose 3.1% across the company. But it was flat in both North American businesses: PepsiCo Foods North America and PepsiCo Beverages North America.
Outside North America, every division grew strongly. Organic revenue rose 9% in Europe, the Middle East and Africa, 9% in Asia Pacific Foods, 7% in the international beverages business and 6% in Latin America.
| Europe, M. East, Africa | +9% |
|---|---|
| Asia Pacific Foods | +9% |
| Intl beverages | +7% |
| Latin America Foods | +6% |
| N. America drinks | 0% |
| N. America foods | 0% |
| Total | +3% |
Source: PepsiCo, third-quarter 2026 results, 8 October 2026. Organic revenue excludes currency moves, acquisitions and divestitures.The Macro Notebook
In North American snacks, PepsiCo sold slightly more but for less. Volume rose 0.5%, while effective net pricing, the price after discounts, cut revenue by 1 point. That is partly a choice: PepsiCo credits “affordability initiatives” for the snack volume it has won back this year. Operating profit in that division fell 13% to $1.33bn.
In North American drinks, it was the other way round. Pricing added 3 points, but volume fell 3%. Reported revenue there rose 5%, but all of that came from acquisitions made in 2025.
Tariff refunds helped profit
Core operating profit rose 3% to $4.28bn. The company says tariff refunds added 4 percentage points to that growth. Without them, core operating profit would have fallen by about 1%, by our calculation.
The refunds follow the Supreme Court’s ruling in February that the emergency tariffs were unlawful. Importers are now claiming the money back, as we reported on 8 October in the case of Levi Strauss, which also used refunds to lift its quarter.
The reported numbers look stronger than the core ones. Operating profit rose 19% to $4.26bn, helped by gains on commodity hedges and by charges and credits linked to deals. PepsiCo strips these out of its core figures.
Why the forecast came down
Ramon Laguarta, the chief executive, said PepsiCo would act “with urgency” to improve its performance in North America, with more spending on new products, brands and how it sells to each type of store. To pay for it, the company is preparing “additional structural cost reduction actions”, to be carried out “in the coming months”. He named one more pressure: “rising input cost inflation”.
PepsiCo gave no separate reason for the lower forecast. But the third quarter already showed higher spending on advertising and marketing and higher operating costs. The forecast for revenue barely changed: PepsiCo expects organic revenue to grow about 3%, inside its earlier range of 2% to 4%, and net revenue about 6%.
The money for shareholders is unchanged. PepsiCo still plans to return $8.9bn this year: $7.9bn in dividends and $1.0bn in share buybacks.
What to watch next
The details of the cost cuts are the next thing to look for. PepsiCo said they are still being identified.
The quarter also shows a pattern worth watching in other consumer companies. Sales abroad are strong, but in North America shoppers are buying fewer drinks at higher prices and more snacks only at lower ones. A one-off tariff refund covered part of the gap this quarter. It will not be there next year.
Disclosure
This is analysis and opinion, not investment advice.