PepsiCo Shares Fall After Mixed Q2 Results
PepsiCo reported second-quarter results that beat revenue expectations, although adjusted earnings came in slightly below analyst forecasts.
Shares of PepsiCo fell more than 4% at the market open following the report.
Revenue Beats Expectations
The company posted adjusted earnings per share of $2.20, just below analyst expectations of $2.21.
Revenue reached $24.18 billion, beating estimates of $23.97 billion. This also marked a 6.4% increase from $22.73 billion in the same period last year.
Organic Revenue Growth Improves
PepsiCo’s organic revenue grew 2.4% in the quarter.
The growth was supported by effective pricing and improved volumes across its global convenient foods and beverage businesses.
CEO Highlights Strong Global Volumes
Chairman and CEO Ramon Laguarta said the company delivered strong organic volume and net revenue growth in both global foods and beverages.
He also noted that PepsiCo’s year-to-date global organic volume growth reached its strongest pace since 2022.
The improvement was helped by international strength and a broader product portfolio, including portion-control options, hydration products, protein and fiber offerings, energy drinks, and zero-sugar beverages.
International Business Shows Strength
PepsiCo’s international segments delivered solid results during the quarter.
Asia Pacific Foods, International Beverages Franchise, and Europe, Middle East and Africa all reported organic volume growth.
In North America, the convenient foods business gained volume market share through innovation and affordability efforts. The beverage business also benefited from acquisitions completed in 2025.
Margins Remain Under Pressure
Core operating profit rose 4% to $4.07 billion.
However, core operating margin fell by 40 basis points to 16.8%, showing that profitability remained under some pressure.
PepsiCo Keeps 2026 Guidance
For fiscal 2026, PepsiCo reaffirmed its full-year outlook.
The company still expects organic revenue growth of 2% to 4% and core constant currency EPS growth of 4% to 6%.
Including foreign exchange benefits, the midpoint of the guidance suggests core EPS growth of 5% to 7%.
Analysts Point to North America Weakness
Analysts at Vital Knowledge described the report as mostly in line, but said the details were slightly negative.
They pointed to lower year-over-year margins and softer organic revenue in North America, both in food and beverages.
Morgan Stanley Calls Results Lower Quality
Morgan Stanley analyst Dara Mohsenian called PepsiCo’s second-quarter report “lower quality.”
He said results were acceptable given the low expectations going into the quarter. However, he added that North America weakness remains a key concern for investors.
PepsiCo also said North America was softer than expected in the second quarter and that improvement may be more gradual during the rest of the year.
