PepsiCo Trims Outlook, as North American Unit Underperforms — Update
By Connor Hart
PepsiCo cut its earnings outlook for the year and said it will continue removing costs from the business, as it works to turn around its struggling North American business.
Trends across PepsiCo's North American business improved from last quarter, the company said Thursday. New product launches and lower prices helped spur sales across its snacks business, while strong sales of functional and zero-sugar beverages offset weak soda sales.
Still, the business isn't operating as PepsiCo would like it to.
"Our business in North America performed below our expectations and represents a meaningful opportunity for improvement," Chief Executive Ramon Laguarta said in prepared earnings remarks on Thursday.
Strong sales trends across PepsiCo's international business helped offset the weaker-than-anticipated results in its North American business. Fiscal third-quarter revenue climbed 5.6% to $25.27 billion, ahead of Wall Street estimates for $24.95 billion. On an organic basis, revenue was up 3.1%.
Profit also climbed, coming in at $3.05 billion for the quarter ended Sept. 5, compared with $2.6 billion a year earlier. On an adjusted basis, quarterly earnings of $2.34 a share topped analysts' forecasts for $2.29.
"Looking ahead, we remain focused on building upon the strength of the International business while acting with urgency to sustainably improve our performance in North America," Laguarta said.
PepsiCo will continue working to improve performance in part with new products and brand building, leaning into current trends such as protein and the removal of artificial colors and flavors. The company is additionally working to identify more structural cost-reduction actions that it plans to implement in the coming months, Laguarta said.
For the year, PepsiCo cut its adjusted earnings outlook to between up 1% and up 2%, compared with a prior forecast of up 4% to up 6%. The company narrowed its organic revenue outlook to up roughly 3%, compared with a previous view of up 2% to up 4%.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
October 08, 2026 07:12 ET (11:12 GMT)
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