PepsiCo cuts forecast and deepens cost reductions as North America recovery drags
PEP•PepsiCo lowered its 2026 core earnings per-share growth forecast to 1% to 2%, from the low end of its prior 4% to 6% range, and said it would implement additional cost cuts as North American recovery takes longer than planned.
1. Forecast and cost cuts
PepsiCo said North American growth and margin recovery were taking longer than planned and that it would implement additional structural cost reductions in the coming months. Third-quarter revenue exceeded market expectations, and the company adjusted its 2026 organic revenue growth forecast to about 3%, from a previous range of 2% to 4%.
2. North America pressures
PepsiCo cut its 2026 core earnings per-share growth forecast, adjusted for currency fluctuations, to 1% to 2%, versus previous expectations for the low end of 4% to 6%. Third-quarter core operating margin fell 35 basis points year over year; North American food volumes were flat, while beverage volumes declined 2%.
3. Company response
CFO Steve Schmitt said North American core operating margin would remain under pressure in the fourth quarter. CEO Ramon Laguarta said the additional savings would help fund investments aimed at accelerating organic revenue growth and mitigating rising input costs; the company said its international business continued to perform well.
