PepsiCo cuts 2026 earnings forecast as North American recovery slows
Strong international snack sales, including 11% volume growth in Asia-Pacific, helped offset weaker North American beverage demand and ongoing margin pressures.
USA – PepsiCo has lowered its 2026 earnings forecast as its North American business recovers more slowly than expected, despite stronger international demand and third-quarter revenue growth that exceeded analysts’ expectations.
The US-based food and beverage company now expects core earnings per share to grow by 2.5% to 3.5% in 2026, down from its previous forecast of growth at the lower end of a 5% to 7% range.
However, PepsiCo expects annual net revenue to increase by approximately 6%, at the upper end of its previous 4% to 6% guidance.
Third-quarter revenue rose 5.6% year on year to US$25.27 billion, while adjusted earnings reached US$2.34 per share, exceeding market forecasts.
Net income attributable to PepsiCo increased to US$3.05 billion, or US$2.23 per share, from US$2.6 billion, or US$1.90 per share, a year earlier. Organic revenue, excluding acquisitions, divestitures and currency movements, grew 3.1%.
“Our business in North America performed below our expectations and represents a meaningful opportunity for improvement,” chairman and chief executive officer Ramon Laguarta said in prepared remarks.
North American beverage volumes declined 2% during the quarter, while food volumes remained unchanged. Executives expect consumers in the region to remain under pressure over the next 12 to 18 months.
Chief financial officer Steve Schmitt said the recovery in domestic operations was progressing more slowly than anticipated.
“We expect North America’s core operating margin performance to remain under pressure in the fourth quarter,” Schmitt said.
International markets continued to support performance, accounting for 41% of PepsiCo’s revenue so far this year, according to Laguarta. Global snack food volumes increased 4%, marking their strongest growth since 2021, while Asia-Pacific snack volumes rose 11%.
The company also reported strong demand for Lay’s snacks linked to the World Cup and market-share gains in China and Brazil.
PepsiCo is pursuing product innovation and marketing investments to support its recovery. Its priorities include snacks with simpler ingredients, added protein or fibre, functional hydration products, energy drinks and zero-sugar beverages.
The company is also targeting record productivity savings amid elevated input costs, inflation-related pressure on demand and competition from GLP-1 weight-loss drugs. These measures form part of its turnaround efforts launched after activist investor Elliott Investment Management acquired an approximately US$4 billion stake a year ago.
Laguarta said PepsiCo plans to reduce redundancies and discretionary spending to help fund innovation and marketing initiatives.
The company’s revised earnings outlook reflects continued challenges in North America, even as international operations and snack sales provide support.
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