PepsiCo's organic revenue rose 2% in the second quarter, comprising mid- to high-single-digit expansion internationally, 1% growth in North American beverages, and a 2% decline in North American foods. Core operating margin fell 40 basis points to 16.8%.
Demographic and lifestyle shifts could further fuel snack consumption globally beyond our expectations.
Bears
Shifting consumer preference to healthier snacks and beverages may impede the firm’s ability to pass on higher costs in price increases thus weighing on margins and returns.
PepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay’s, Cheetos, and Doritos, among others. The company dominates the global savory snacks market and also ranks as the second-largest beverage provider in the world (behind Coca-Cola) with diversified exposure to carbonated soft drinks, or CSD, as well as water, sports, and energy drink offerings. Convenience foods account for approximately 58% of its total revenue, with beverages making up the rest. Pepsi owns the bulk of its manufacturing and distribution capacity in the US, but uses bottlers overseas for beverages. International markets made up 41% of total sales and 46% of operating profits before corporate expenses in 2025.