PepsiCo 8-K

PositiveEarningsGuidance reaffirmed

Prior-year Rockstar and Be & Cheery impairments amplified GAAP profit growth; rising operating costs squeezed core margins.

Filed 2026-07-08 17:55 ET

Summary

Q2 2026 results with FY2026 guidance reaffirmed. Net revenue rose 6.4% in the quarter and 7.3% YTD, including organic revenue growth of 2.4% and 2.5%, respectively. GAAP profit growth was amplified by prior-year impairment charges; core operating profit and core EPS grew more moderately.

Key Figures

Metric Q2 2026 Q2 2025 Y/Y
Net revenue $24.2B $22.7B 6.4%
Operating profit $4.02B $1.79B 125%
Core operating profit, non-GAAP $4.07B $3.91B 4%
Net income attributable to PepsiCo $2.98B $1.26B 136%
Diluted EPS $2.18 $0.92 137%
Core EPS, non-GAAP $2.20 $2.12 4%
Metric YTD 2026 YTD 2025 Y/Y
Net revenue $43.6B $40.6B 7.3%
Operating profit $7.24B $4.37B 65%
Core operating profit, non-GAAP $7.12B $6.70B 6%
Net income attributable to PepsiCo $5.31B $3.10B 71%
Diluted EPS $3.88 $2.25 72%
Core EPS, non-GAAP $3.81 $3.59 6%
Operating cash flow $2.37B $996M 137%
Free cash flow, non-GAAP $1.17B $(342)M n/m
  • Q2 organic revenue growth reflected effective net pricing and organic volume growth; foreign exchange added 2.2 percentage points and acquisitions/divestitures added 1.8 points to reported revenue growth. Operating margin expanded 875 bp, largely reflecting prior-year Rockstar and Be & Cheery impairment charges; core operating margin contracted 40 bp as productivity savings and pricing were partly offset by operating cost increases.
  • YTD revenue growth included a 2.7-point foreign-exchange benefit and a 2.1-point net benefit from acquisitions and divestitures. YTD organic growth was driven by effective net pricing and organic volume growth.
  • YTD share repurchases were $479M vs $494M; weighted-average shares were 1.370B vs 1.374B. Cash and cash equivalents were $10.3B vs $9.16B at 12/27/2025; total short- and long-term debt obligations were $53.2B vs $49.2B.

Guidance

Metric Period Guidance Prior Direction
Organic revenue growth, non-GAAP FY2026 2%-4% — Reaffirmed
Core constant-currency EPS growth, non-GAAP FY2026 4%-6% — Reaffirmed
Core annual effective tax rate, non-GAAP FY2026 ≈22% — Reaffirmed
Capital spending as a percentage of net revenue FY2026 Below 5% — Reaffirmed
Free cash flow conversion, non-GAAP FY2026 At least 80% — Reaffirmed
Total cash returns to shareholders FY2026 ≈$8.9B: $7.9B dividends; $1.0B repurchases — Reaffirmed
Reported net revenue growth FY2026 4%-6% — Reaffirmed
Core EPS growth, non-GAAP FY2026 ≈5%-7% — Reaffirmed
Foreign-exchange contribution to reported net revenue and core EPS growth FY2026 ≈1 percentage point — Reaffirmed
Acquisitions, net of divestitures, contribution to reported net revenue growth FY2026 1 percentage point — Reaffirmed

Investor Takeaways

  • FY2026 organic revenue and core EPS growth against the reaffirmed ranges will show whether revenue momentum and productivity gains can offset operating cost pressure.

The summary is written by an AI model reading the filing.

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