PepsiCo delivered a mixed message on Thursday: third-quarter revenue of $25.27 billion beat analyst estimates and organic revenue grew 3.1 percent — its fastest pace since late 2023 — but the company slashed its full-year forecast.
The beverage and snack giant now expects core constant-currency earnings-per-share growth of just 1 to 2 percent for fiscal 2026, down from the low end of its previous 4 to 6 percent range. Chief Financial Officer Steve Schmitt said North America's margin recovery "is taking more time than we planned," with margins under pressure through the fourth quarter; third-quarter core operating margin fell 35 basis points.
The company plans additional cost cuts as it contends with high input costs, inflation-weary consumers and the looming GLP-1 weight-loss-drug threat to snack demand. The reset comes about a year after activist investor Elliott took a roughly $4 billion stake and began pushing for change.
Investors will now be watching whether the cost-cutting program can stabilize margins before the key holiday selling season.
