PepsiCo (PEP) reported third-quarter 2026 net revenue of $25.3 billion on October 8, up 5.6% from a year earlier, with organic revenue up 3.1% and volume growing in both snacks and beverages [1]. Reported earnings per share rose 17% to $2.23 and core EPS 2% to $2.34 [1]. The company raised its 2026 revenue outlook to about 6% growth but lowered its core EPS growth forecast to 2.5% to 3.5%, from the low end of 5% to 7%, to fund more investment in North America; the shares rose 3.7% that day [1][2].
What did PepsiCo report for Q3 2026?
| Third quarter | 2026 | 2025 | Change |
|---|---|---|---|
| Net revenue | $25.27 billion | $23.94 billion | +5.6% |
| Organic revenue growth | +3.1% | n/a | n/a |
| Operating profit (GAAP) | $4.26 billion | $3.57 billion | +19% |
| Operating margin (GAAP) | 16.9% | 14.9% | +1.95 points |
| Core operating profit | $4.28 billion | $4.14 billion | +3% |
| Core operating margin | 16.9% | 17.3% | -0.35 points |
| Earnings per share (GAAP) | $2.23 | $1.90 | +17% |
| Core EPS | $2.34 | $2.29 | +2% |
Source: PepsiCo third-quarter 2026 results filed with the SEC [1]. Organic revenue excludes currency moves and acquisitions or divestitures; "core" results exclude items the company considers not part of ongoing operations.
Revenue growth of 5.6% came from 3.1% organic growth, a 1.7-point net benefit from acquisitions and divestitures, and a 0.7-point boost from foreign exchange [1]. Organic growth reflected both higher effective net pricing and organic volume growth [1]. For the first nine months of 2026, revenue rose 6.7% to $68.9 billion and core EPS 5% to $6.15 [1].
What drove PepsiCo's results?
North America: volume back, pricing lower
In North American convenient foods, the Frito-Lay and Quaker businesses, PepsiCo said revenue trends "improved sequentially, reflecting savory snacks volume growth and volume market share improvement, offset by lower effective net pricing" [1]. In other words, PepsiCo is selling more bags of chips after cutting prices or offering more value, a change from earlier years when price increases drove growth while volumes fell. North American beverages grew revenue 5%, mainly because of acquisitions made in 2025 [1].
International strength
Each international segment delivered strong revenue growth, PepsiCo said, aided by organic volume growth in Asia Pacific foods, the international beverages franchise and Latin America foods [1]. Chief executive Ramon Laguarta said the results "reflect the scale and resilience of the international business" [1].
Profit: tariff refunds helped, costs rose
Core operating profit rose 3%, but the core margin narrowed by 0.35 points [1]. PepsiCo said core profit benefited from productivity savings, effective net pricing and a 4-percentage-point favorable impact from tariff refunds, partly offset by higher operating costs and more advertising and marketing [1]. Reported operating profit rose faster, 19%, mainly because of acquisition and divestiture items and mark-to-market gains on commodity hedges [1].
Why did PepsiCo lower its EPS outlook?
| 2026 guidance | Current (October 8) | Previous |
|---|---|---|
| Organic revenue growth | About +3% | +2% to +4% |
| Net revenue growth | About +6% | +4% to +6% |
| Core constant currency EPS growth | +1% to +2% | Low end of +4% to +6% |
| Core EPS growth | +2.5% to +3.5% | Low end of +5% to +7% |
| Cash returns to shareholders | $8.9 billion | $8.9 billion |
Source: PepsiCo fiscal 2026 guidance [1]. Cash returns are $7.9 billion of dividends and $1.0 billion of share repurchases.
Laguarta said PepsiCo is "acting with urgency to sustainably improve our performance in North America through more investments in innovation, effective brand building, and sharper marketplace execution by channel," and that additional structural cost cuts are being identified to help pay for them [1]. Lower core EPS growth this year is the cost of that investment. The revenue outlook rose because of stronger organic growth, a larger currency benefit and acquisitions [1].
What does PepsiCo's quarter say about consumers?
Food at home prices rose 2.2% in the 12 months through August 2026, much less than overall inflation of 3.4% and gasoline at 27.4%, according to the consumer price index [3]. When fuel takes a bigger share of budgets, households look for value in groceries. The University of Michigan's consumer sentiment index fell to 46.3 in early October 2026 from 53.6 a year earlier [4].
PepsiCo's answer, lower effective prices to win back volume, shows in its results: volume and market share rose in North American snacks while pricing fell [1]. The company is keeping its dividend and buyback plans unchanged at $8.9 billion for the year [1].
How strong is PepsiCo's cash flow?
PepsiCo's fiscal quarters run 12 weeks except the last, and its first three quarters together cover 36 weeks. In the 36 weeks of 2026 through early September, net cash from operating activities was $7.95 billion, up from $5.47 billion a year earlier [1]. Over the same period it paid $5.94 billion of dividends and bought back $739 million of shares, and it reported long-term debt of $42.7 billion at the end of the quarter [1]. The company expects capital spending below 5% of net revenue and a free cash flow conversion ratio of at least 80% for the year, the same targets as before [1].
The steady cash flow is what lets PepsiCo hold its dividend plan while cutting its earnings outlook. Dividends are the largest part of the $8.9 billion it plans to return to shareholders in 2026 [1].
How did PepsiCo stock react?
DataPorium data show PepsiCo shares closed at $128.34 on October 8, 2026, up 3.7% from $123.73 the day before, and at $125.97 on October 9 [2]. The stock fell 6.4% in the third quarter, from $135.40 on June 30 to $126.72 on September 30, and was down 11.7% for 2026 through September from $143.52 at the end of 2025 [2].
PepsiCo's Q3 2026 revenue rose 5.6% with volume growth in snacks and beverages, but it cut its 2026 core EPS growth outlook to 2.5% to 3.5% to invest in North America.
Frequently asked questions
How much did PepsiCo earn in Q3 2026?
PepsiCo earned $2.23 a share on a reported basis and $2.34 on a core basis in the third quarter of 2026, on net revenue of $25.27 billion [1].
Did PepsiCo cut its guidance?
It lowered its 2026 core EPS growth forecast to 2.5% to 3.5% from the low end of 5% to 7%, while raising its net revenue growth forecast to about 6% [1].
Are PepsiCo's sales volumes growing?
Yes. PepsiCo reported organic volume growth in both beverages and convenient foods in Q3 2026, including savory snacks volume and market share gains in North America [1].
What is PepsiCo's dividend and buyback plan for 2026?
PepsiCo plans $8.9 billion of cash returns in 2026: $7.9 billion of dividends and $1.0 billion of share repurchases [1].
