PepsiCo’s strategic moves ‘resonating with consumers’

PURCHASE, NY. — PepsiCo Inc.’s investments in its North American food business “are resonating with consumers,” chairman and chief executive officer Ramon Laguarta said in reporting bottom- and top-line gains for the fiscal 2026 second quarter and first half.

Purchase-based PepsiCo edged above Wall Street’s adjusted earnings-per-share forecast by a penny, as the company’s global convenient foods and beverages posted strong organic volume and net revenue growth, Laguarta said.

“Year-to-date, global organic volume has increased at the highest rate since 2022, aided by the strength of the international business — which derives approximately 80% of its net revenue from developing and emerging markets — and the continued evolution of the portfolio to offer more choices through portion control varieties, diverse ingredients (and) functional benefits such as hydration, protein and fiber, energy and zero-sugar beverage varieties,” Laguarta said in remarks on the quarterly performance.

For the 12-week quarter ended June 13, net income climbed 136% to $2.98 billion, equal to $2.18 per share on the common stock, from $1.26 billion, or 92¢ per share, a year earlier. Excluding restructuring, impairment and acquisition/divestiture-related charges and other items — including year-ago impairment costs of $1.44 billion — core net earnings were up nearly 4% to $3.02 billion, or $2.20 per share, from $2.91 billion, or $2.12 per share, in the prior-year period. Analysts, on average, had projected adjusted EPS of $2.19.

Overall net revenue for the quarter rose 6% year over year to $24.18 billion from $22.73 billion and was up 2.4% on an organic basis. At the top end, analysts had forecast revenue of $24.19 billion. Volume grew 3% for the Convenient Foods and 2% for the Beverages segments.

“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,” Laguarta said.

First-half net income grew 71% to $5.31 billion, or $3.88 per share, from $3.1 billion, or $2.25 per share, a year ago. On an adjusted basis, net earnings rose about 6% to $5.22 billion, or $3.81 per share, from $4.94 billion, or $3.59 per share, a year earlier. Net revenue for the 24-week period advanced 7% to $43.62 billion and increased 2.5% organically. Volume was up 3% for Convenient Foods and 1% for Beverages.

“We are also elevating productivity across the organization — most notably in developed markets — by advancing our enterprisewide agenda through automation, digitalization and simplification initiatives across the business that aim to improve operating leverage,” Laguarta added. “Savings will be used to help sustain investments that support the evolution of the portfolio and deliver good value to consumers.”

PepsiCo CEO Ramon Laguarta noted that US salty snacks have returned to volume growth for three straight quarters.

| Photo: ©SNEHIT PHOTO – STOCK.ADOBE.COM

PepsiCo Foods North America (PFNA), which includes Frito‐Lay and Quaker Foods, totaled second-quarter net revenue of $6.37 billion, down 2% on both a reported and an organic basis. The latter result reflected a 2% decrease in net pricing and flat volume.

“The investments we are making to improve volume performance are resonating with consumers as we remain focused on evolving our portfolio and see some positive results,” Laguarta said. “PFNA delivered volume share improvements in both the US savory and salty categories in the quarter and year-to-date, with improvements in household penetration trends. US salty category volume performance has returned to growth for three consecutive quarters, with the category outperforming the US food and beverage category.”

PFNA added volume share in potato chips, flavored and unflavored tortilla chips, pita/bagel chips, curls and puffs, pretzels, SunChips wavy grain chips, grits, hot cereal, Quaker rice snacks, and pancake syrup, he noted.

“During the quarter, Doritos, Ruffles and Miss Vickies performed well and delivered both volume and net revenue growth,” he said. “Portion control multipacks, which exceed $3.5 billion in annual net revenue, delivered both volume and net revenue growth in the quarter. Permissible options, which approximates $3 billion in annual net revenue, such as Baked, Simply, SunChips, Siete and Quaker Rice Cake offerings, each delivered strong volume and net revenue growth in the quarter.”

Second-quarter net revenue for PepsiCo Beverages North America (PBNA) rose 7% to $7.24 billion and inched up 1% organically on a 3% uptick in net pricing and a 2% decrease in volume. PepsiCo posted double-digit revenue gains for all of its international businesses, with organic growth rising between 4% and 9% for each.

PepsiCo maintained its fiscal 2026 guidance, which calls for growth of 4% to 6% in core constant currency and 2% to 4% in organic revenue.

“We are encouraged by the trajectory of our international business and expect its resilient performance to continue,” said Steve Schmitt, chief financial officer. “Our North America business was softer than we anticipated in the second quarter, and we now expect a more gradual improvement in performance trends for the balance of this year. We’re also expecting higher input-cost inflation in the second half versus the first half of this year. Record productivity savings and refund claims for tariffs paid last year should help mitigate a good portion of the higher costs and investments in the business that aim to accelerate growth.