Inflationary Pressures Weighed on PepsiCo's Sales Growth — Update

By Connor Hart

Consumers are tightening their budgets and looking for value in the supermarket in the face of ongoing inflationary pressures.

This trend weighed on PepsiCo's results in the recent quarter. Both profit and revenue were higher, but a widespread moderation across the U.S. food and beverage category tempered growth, Chief Executive Ramon Laguarta said in prepared earnings remarks.

The snacks and soda maker on Thursday said revenue climbed 6.4% to $24.18 billion in its second quarter, ahead of the $23.95 billion that Wall Street had modeled. On an organic basis, revenue was up 2.4%.

PepsiCo has been working to improve sales by cutting prices across its snacks business in an effort to bring back cost-conscious customers. The company is also restaging several of its largest brands to lean into current trends, emphasizing protein and the removal of artificial colors and flavors.

These efforts are bearing some fruit. In beverages, functional hydration and zero-sugar offerings continue to perform well, Laguarta said, citing volume and net revenue growth across the company's Gatorade and Propel brands.

The company is overhauling its marketing for Gatorade, focusing on its hydration benefits while gradually removing artificial colors from the sports drinks. PepsiCo has already retooled its Lay's potato chip brand, and it is also working to do the same to its Tostitos tortilla chips and Quaker-branded foods.

At the same time, PepsiCo aims to improve its productivity by continuing to invest in automation, digitization and simplification initiatives across the business. "Savings will be used to help sustain investments that support the evolution of the portfolio and deliver good value to consumers," Laguarta said.

For its 12 weeks ended June 13, PepsiCo posted a profit of $2.98 billion, or $2.18 a share, compared with a profit of $1.26 billion, or 92 cents a share, in last year's comparable quarter.

Stripping out one-time items, earnings came in at $2.20 a share. Analysts surveyed by FactSet had expected adjusted earnings of $2.19 a share.

For the year, PepsiCo backed its full-year outlook for earnings and sales growth. The company expects adjusted earnings to increase between 4% and 6%, and for organic revenue to climb between 2% and 4%.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

July 09, 2026 07:29 ET (11:29 GMT)