PepsiCo cuts forecast, deepens cost cuts as North America recovery drags
PEP•PepsiCo lowered its 2026 core earnings-per-share growth forecast to 1% to 2%, from its prior expectation of the low end of 4% to 6%, and expects North American core operating margin to remain under pressure in the fourth quarter. It revised its 2026 organic revenue growth forecast to about 3%, from 2% to 4%.
1. Forecast and margins
PepsiCo said recovery in its key North American market is taking longer than planned and that it would pursue additional cost cuts to counter sluggish demand for snacks and beverages. Third-quarter revenue exceeded market expectations, while core operating margin fell 35 basis points year over year; year to date, it was down 25 basis points to 16.5% of revenue.
2. North America challenges
Third-quarter food volumes in North America were flat, while beverage volumes fell 2% from a year earlier. PepsiCo said retailers and buying groups were removing products or reducing shelf space allocated to them while focusing on private-label brands.
3. Cost-cutting plans
CEO Ramon Laguarta said additional structural cost-reduction actions would be implemented in coming months to help fund investments aimed at accelerating organic revenue growth and mitigating rising input-cost inflation. The company said its international business continued to perform well.
