PepsiCo reported stronger-than-expected quarterly earnings and revenue on Thursday, with growth in international markets helping the company overcome another period of weaker demand in North America. Shares of the beverage and snack giant rose over 2% in morning trading following the announcement.
According to data from LSEG, PepsiCo posted adjusted earnings per share of $2.29, ahead of analyst expectations of $2.26. Revenue reached $23.94 billion, also topping projections of $23.83 billion.
Net income attributable to the company stood at $2.6 billion, or $1.90 per share, down from $2.93 billion, or $2.13 per share, a year earlier. Excluding one-time restructuring and impairment costs, earnings were flat year-over-year.
Global Markets Deliver Growth Amid Domestic Slowdown
While PepsiCo’s overall sales rose 2.6%, organic revenue — which excludes foreign exchange effects and portfolio changes — increased 1.3%. Much of that growth came from international regions, where demand for both snacks and beverages remained resilient.
In contrast, U.S. consumers continued tightening their wallets. PepsiCo’s global food and beverage volume declined 1% in the quarter as customers shifted toward smaller, more affordable packages — a strategy CEO Ramon Laguarta described as key to maintaining brand loyalty amid inflation pressures.
“The smaller sizing appeals to price-conscious consumers and helps drive trial, even though it slightly reduces volume,” Laguarta said during the company’s earnings call.
Focus on Reviving North American Sales
The company’s North American divisions remain under pressure. Volume in PepsiCo Foods North America — home to Doritos, Quaker Oats, and Pearl Milling brands — fell 4%, while beverage volumes slipped 3%. Executives said turning around domestic performance is a “top business priority.”
To regain traction, PepsiCo is doubling down on innovation and product reformulation. It plans to introduce more “permissible snacks,” such as Stacy’s pita chips and Quaker rice cakes, while debuting Doritos Protein to tap into rising demand for protein-rich foods.
The company is also rolling out Lay’s chips with no artificial colors or flavors and launching new lines — Doritos NKD and Cheetos NKD — made without synthetic dyes. In addition, PepsiCo said it will begin using olive and avocado oils in some of its snacks to meet shifting consumer preferences toward perceived healthier ingredients.
“We are sharpening our price-pack architecture and accelerating cost reductions to improve North American profitability,” executives noted in prepared remarks.
Strategic Moves and Corporate Updates
PepsiCo’s beverage division showed what Laguarta called “improved momentum,” driven by steady growth in its flagship soda brand and a strong performance from Poppi, a prebiotic soda startup Pepsi recently acquired. Poppi’s retail sales surged more than 50% year-over-year.
In September, PepsiCo finalized the divestiture of Rockstar Energy in the U.S. and Canada to Celsius Holdings, though it continues to hold an 11% ownership stake in the energy drink maker.
That same month, Elliott Investment Management revealed a $4 billion stake in PepsiCo, urging management to consider structural changes — including potentially refranchising its North American bottling operations. Laguarta acknowledged that discussions with Elliott are ongoing, emphasizing that both sides share the belief that the company remains undervalued.
Stable Outlook, Leadership Change Ahead
PepsiCo reaffirmed its full-year forecast, expecting core earnings per share to remain roughly unchanged and organic revenue growth in the low single digits.
The company also announced a significant leadership transition: Chief Financial Officer Jamie Caulfield will retire next month, with Steve Schmitt, currently CFO of Walmart U.S., set to succeed him on November 10.
Despite the near-term challenges in its home market, PepsiCo’s continued global expansion and product innovation signal a long-term strategy aimed at balancing premium growth abroad with value-driven offerings in the U.S.
As investors look ahead, Laguarta summed up the company’s approach: “We’re confident that by managing costs, refreshing our brands, and staying close to consumers’ evolving preferences, we can deliver sustainable growth across all our markets.”
