PepsiCo lowered its 2026 core EPS growth outlook to 2.5% to 3.5%, down from its previous expectation at the low end of 5% to 7%, as rising input costs and weaker margins weighed on the third-quarter earnings call. Executive vice president and CFO Stephen Schmitt attributed the revision primarily to weaker-than-expected margins, higher input costs and unfavorable product mix, noting that six- to 12-month commodity hedges had contained inflation but their expiration was exposing the business to higher costs, alongside the expiration of tariff-related benefits in North American beverages. The company still expects approximately 6% net revenue growth and 3% organic revenue growth for the year, and reported core EPS of $2.34, exceeding the Zacks Consensus Estimate of $2.29, on revenues of $25.27 billion that surpassed the $24.88 billion consensus estimate. Chairman and CEO Ramon Laguarta said international organic revenues rose 8% in the quarter with operating margin expanding 105 basis points, and international operations represented 45% of year-to-date profit, while North American snacks returned to low-single-digit volume growth from declines a year earlier. Management said it is evaluating structural alternatives including potential beverage refranchising in selected U.S. markets and is advancing its One North America integration initiative, with more clarity on 2027 expectations scheduled for February.
PepsiCo IncPepsiCo cut its 2026 core EPS growth outlook to 2.5%-3.5% from the low end of 5%-7% on weaker margins and higher input costs.
