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PepsiCo shares rose about 1% in premarket trading Thursday, October 8, after the snack and beverage company reported third-quarter revenue and adjusted earnings above analyst expectations. The results offered investors a stronger-than-anticipated quarterly performance, led by international markets, even as the company cut its full-year earnings growth forecast because of continued challenges in North America.
PepsiCo reported adjusted earnings of $2.34 per share, topping the $2.29 expected by analysts polled by FactSet, while net revenue increased 5.6% to $25.27 billion, above the $24.95 billion consensus. The mixed report gave the stock a modest lift before the market opened, but the reduced profit outlook and weaker domestic volume trends remained significant counterweights.
Quarterly results topped expectations
The fiscal third quarter ended September 5. PepsiCo said net income attributable to the company was about $3.05 billion, compared with $2.60 billion a year earlier. Reported earnings were $2.23 per share, while the adjusted figure excludes certain items and is the measure compared with analysts’ forecast.
Organic revenue, which excludes the effects of acquisitions, divestitures and foreign-exchange movements, grew 3.1%. Revenue growth was broader than the North American picture: the company said each of its international segments delivered net revenue growth, and global snack-food volumes rose 4%, their strongest growth rate since 2021, according to Associated Press reporting.
International demand contrasts with North America
PepsiCo’s overseas business supplied much of the volume strength. The company pointed to strong demand for Lay’s snacks associated with the World Cup and said it gained share in markets including China and Brazil. Snack volumes in the Asia-Pacific region increased 11%.
North American trends were more subdued. Frito-Lay snack volumes were flat year over year, while beverage volumes fell 2%; PepsiCo said U.S. salty-snack sales growth was offset by declines in Canada. The company described North American trends as improving sequentially, with lower net pricing helping volume and market-share performance, but the regional figures still show why management is pressing for a turnaround.
Full-year earnings forecast cut
PepsiCo now expects fiscal 2026 adjusted earnings per share to grow 2.5% to 3.5%, down from its previous forecast of 5% to 7% growth. The company raised its full-year net-revenue growth expectation to approximately 6%, toward the top of its earlier 4% to 6% range, while narrowing its organic-revenue growth outlook to about 3% from 2% to 4%.
The lowered earnings forecast matters because the revenue outlook improved while expected profit growth weakened. That divergence indicates the sales increase is not translating into the earnings growth previously anticipated; PepsiCo cited higher costs and continued work to improve its North American performance in its explanations reported Thursday.
Cost actions and product changes ahead
Chief Executive Ramon Laguarta said PepsiCo would focus on building international strength while acting urgently to improve North America. The company plans new product launches and more effective marketing, and said it would identify additional structural cost-reduction measures for implementation in the coming months.
Those cost actions are intended to support growth investment and address cost pressures, rather than replace efforts to improve sales. The company did not provide detailed savings targets or a specific implementation timetable in the reporting available Thursday morning.
What investors are watching next
The next scheduled event was PepsiCo’s question-and-answer session with analysts at 8:15 a.m. Eastern on October 8, featuring Laguarta and Chief Financial Officer Steve Schmitt. PepsiCo had announced the session alongside its planned release of results and management materials; further details on the outlook and regional performance could be discussed there.
The immediate share move reflected the quarterly beat, but it did not resolve the central tension in the report: international volume growth and higher expected revenue against weaker North American demand and a lower earnings-growth forecast. The company’s next updates will be important for tracking whether its pricing, product and cost initiatives can improve domestic performance, but Thursday’s report did not establish when a sustained recovery might occur.
