PepsiCo Cuts Its Profit Forecast and Promises More Cost Cuts as North American Snacks Stall
PepsiCo now expects 1% to 2% core earnings growth for 2026, down from the low end of 4% to 6%. CEO Ramon Laguarta says more structural cost cuts are coming.
PepsiCo beat expectations for the quarter, then lowered its outlook for the year. Its North American food and beverage business is not recovering as fast as the company planned.
TLDR
- PepsiCo now expects 2026 core earnings per share to grow 1% to 2%.
- It had previously guided to the low end of 4% to 6%.
- Third-quarter revenue rose 5.6% to $25.27 billion.
- North America foods were flat and North America beverages fell 2%.
- The company says more structural cost cuts are coming.
The Numbers
PepsiCo reported its third-quarter results on October 8. Revenue rose 5.6% to $25.27 billion, and core earnings came in at $2.34 a share, ahead of the $2.29 analysts expected, according to Reuters.
The outlook moved the other way. PepsiCo now expects core earnings per share to grow 1% to 2% this year, down from the low end of its earlier 4% to 6% range. It expects organic revenue growth of about 3%, compared with its earlier 2% to 4% range.
What the Company Says
“Additional structural cost reduction actions are being identified and will be implemented in the coming months,” said chief executive Ramon Laguarta.
On the turnaround in North America, chief financial officer Steve Schmitt said “it is taking more time than we planned.”
The Pressure Points
Reuters points to higher input costs, cautious shoppers dealing with inflation, competition from cheaper private-label snacks and the growing use of GLP-1 weight-loss drugs, which tend to reduce snacking. PepsiCo cut prices on some products by up to 15% in February to win shoppers back, and has since raised prices on some chips.
Why It Matters
PepsiCo is one of the largest snack makers in the world, and North America is its biggest market. When its core salty snack business stalls, it signals that shoppers are buying less, trading down or eating differently. Price cuts, reformulation and smaller portions are all on the table across the industry.
Sources: Reuters via Investing.com; CP24.