PepsiCo to cut costs as weak North America business hurts core profit forecast
PEP•PepsiCo lowered its fiscal 2026 core earnings-per-share growth forecast to 1%-2%, from 4%-6%, and plans additional cost cuts. It expects organic revenue growth of about 3%; quarterly revenue rose 5.6% to $25.27 billion and core EPS was $2.34.
1. Lower profit forecast
PepsiCo lowered its fiscal 2026 forecast for core earnings per share, adjusted for currency fluctuations, to growth of 1%-2%, from its prior forecast of 4%-6%. It expects annual organic revenue to rise about 3%, compared with its previous range of 2%-4%.
2. North America challenges
The company said additional structural cost reductions would be identified and implemented in coming months to fund growth investments and mitigate rising input costs. North American food volumes were flat in the third quarter ended September 5, while beverage volumes fell 2% from a year earlier. CEO Ramon Laguarta said efforts to improve growth and profitability in the region were taking longer than expected.
3. Quarterly results
Quarterly revenue increased 5.6% to $25.27 billion, above analysts’ estimate of $24.96 billion. Core earnings per share of $2.34 also exceeded the $2.29 estimate.
