PepsiCo lowers 2026 core profit forecast, plans more cost cuts as North America lags

Centre · 2PepsiCo said on Thursday 8 October that it was lowering its 2026 core earnings-per-share forecast and would pursue additional cost cuts, citing sluggish demand for its snacks and beverages in North America and rising input costs. 1 2 Centre · 2CNA reported that the company now expects currency-adjusted core EPS to rise 1% to 2%, against a prior forecast of the low end of a 4% to 6% rise; Anadolu Agency reported the new range as 2.5% to 3.5%, against a previous target of the low end of a 5% to 7% range. 1 2 Centre · 2On revenue, CNA said PepsiCo adjusted its 2026 organic revenue forecast to about 3% from 2% to 4%, while Anadolu said it expects annual net revenue growth of about 6%, at the upper end of prior guidance of 4% to 6%. 3 2

Centre · 1Third-quarter results beat expectations: Anadolu reported revenue up 5.6% to $25.27 billion, adjusted EPS of $2.34, net income attributable to PepsiCo of $3.05 billion ($2.23 per share) and organic revenue growth of 3.1%. 2 Centre · 2North America was the weak spot: third-quarter volumes were flat in food and down 2% in beverages, and Chief Financial Officer Steve Schmitt said improving growth and core operating margin was "taking more time than we planned", with North American margin expected to stay under pressure in the fourth quarter. 3 2 Centre · 1CNA reported that core operating margin fell 35 basis points in the quarter and 25 basis points year to date to 16.5% of revenue, whereas in December, after talks with activist investor Elliott Investment Management, PepsiCo had targeted a 100-basis-point gain over three years. 3

Centre · 2CEO Ramon Laguarta said "additional structural cost reduction actions are being identified and will be implemented in the coming months" to fund investment in growth and offset input-cost inflation; Anadolu added that he plans to reduce redundancies and discretionary spending and said North America "performed below our expectations". 1 2 Centre · 1International operations remained stronger, accounting for 41% of revenue so far this year according to Laguarta, and the company is focusing on innovation such as snacks with simpler ingredients and added protein or fiber, functional hydration, energy drinks and zero-sugar beverages. 2 Centre · 1CNA placed the results in a wider context: high input costs, inflation-hit demand, the threat of GLP-1 weight-loss drugs, a turnaround that began after Elliott took a roughly $4 billion stake a year ago, and peers such as General Mills, McCormick and Conagra spending more on promotions. 3

Centre · 1PepsiCo cut prices by up to 15% on products such as Lay's and Doritos in February but said last month it would raise some chip prices; RBC analyst Nik Modi said beverages "continue to disappoint" and PepsiCo would have to fully refranchise its beverage business or keep losing share. Shares were up about 1% to 2% in premarket trading. 3 1