- PepsiCo's North American business faced volume declines due to tighter consumer budgets
- Q2 revenue reached $24.18 billion, beating the $23.95 billion analyst forecast
- Adjusted EPS was $2.20, slightly below the $2.21 expected by Wall Street
PepsiCo's North American business was impacted by tightening domestic consumer budgets, which caused it to slightly miss adjusted earnings per share (EPS) predictions despite exceeding second-quarter revenue expectations.
On Thursday, the company released its mixed Q2 2026 financial results, emphasising a clear contrast between robust foreign growth and local volume difficulties, as reported by CNBC.
CEO Ramon Laguarta stated in prepared remarks posted on the company's website on Thursday that "results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures."
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According to an LSEG survey of analysts, this is how the company reported compared to what Wall Street anticipated:
- $2.20 adjusted earnings per share compared to $2.21 anticipated
- Revenue: $24.18 billion as opposed to the anticipated $23.95 billion
Pepsi's net income attributable to the firm increased from $1.26 billion, or 92 cents per share, to $2.98 billion, or $2.18 per share, in the second quarter.
The company made $2.20 per share, excluding restructuring and impairment charges and other expenses.
At $24.18 billion, net sales increased by 6.4%. During the quarter, organic revenue—which does not include foreign currency, acquisitions, or divestitures—rose by 2.4%.
Due to demand from outside, PepsiCo's top-line performance exceeded forecasts, but its bottom line was squeezed by strategic investments made domestically.
Pepsi had a 3% increase in food volume and a 2% increase in beverage volume worldwide. To more properly reflect demand, the statistic does not include price or foreign exchange variations.
The volume of Pepsi's food and beverages was down in its domestic market, despite the company reporting robust demand elsewhere. Its North American beverage sector suffered a 4% decline in volume, while its North American food business reported stable volume for the quarter.
Due to price increases over the past two years, demand in both groups has decreased. In an effort to regain consumers, Pepsi lowered the cost of Lay's, Tostitos, Doritos, and Cheetos by up to 15% in February. In an effort to increase sales, the business has also been "restaging" some of its well-known brands, such as Lay's and Gatorade, with new branding.
Pepsi reaffirmed its earlier prediction that organic revenue would increase by 2% to 4% and core constant currency earnings per share would rise by 4% to 6% for the entire year.
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