PepsiCo 8-K
EarningsGuidance lowered
Core EPS outlook cut despite higher FX and acquisition contribution estimates; management is identifying more structural cost reductions.
Filed 2026-10-07 17:57 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q3 2026 results and updated FY2026 guidance. Net revenue grew 5.6% and diluted EPS rose 17%; organic revenue growth was 3.1%. PepsiCo lowered its FY2026 core EPS growth outlook while raising its estimates for foreign-exchange and acquisition contributions; several other outlook metrics were narrowed or lowered.
Key Figures
| Metric | Q3 2026 | Q3 2025 | Y/Y |
|---|---|---|---|
| Net revenue | $25.3B | $23.9B | 5.6% |
| Operating profit | $4.26B | $3.57B | 19% |
| Net income attributable to PepsiCo | $3.05B | $2.60B | 17% |
| Diluted EPS | $2.23 | $1.90 | 17% |
| Core operating profit, non-GAAP | $4.28B | $4.14B | 3% |
| Core EPS, non-GAAP | $2.34 | $2.29 | 2% |
| Metric | 36 weeks 2026 | 36 weeks 2025 | Y/Y |
|---|---|---|---|
| Net revenue | $68.9B | $64.6B | 6.7% |
| Operating profit | $11.5B | $7.94B | 45% |
| Net income attributable to PepsiCo | $8.36B | $5.70B | 47% |
| Diluted EPS | $6.10 | $4.15 | 47% |
| Core operating profit, non-GAAP | $11.4B | $10.8B | 5% |
| Core EPS, non-GAAP | $6.15 | $5.88 | 5% |
- Q3 organic revenue grew 3.1%, reflecting effective net pricing and organic volume growth; acquisitions and divestitures added 1.7 percentage points and foreign exchange translation added 0.7 points to net revenue growth. Core operating profit growth reflected productivity savings, pricing and a 4-point benefit from tariff refunds, partly offset by higher operating costs and advertising and marketing.
- Q3 operating margin expanded 195 bp, while core operating margin contracted 35 bp. Reported operating profit growth was helped by acquisition- and divestiture-related items and commodity derivative gains; YTD growth also reflected prior-year Rockstar and Be & Cheery impairment charges.
- YTD operating cash flow was $7.95B vs $5.47B; free cash flow was $5.86B vs $3.24B. Cash and cash equivalents were $10.7B at 9/5/2026.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Organic revenue growth, non-GAAP | FY2026 | ≈+3% | +2% to +4% | narrowed |
| Foreign exchange contribution to net revenue and core EPS growth | FY2026 | ≈+1.5% | ≈+1% | raised |
| Acquisitions, net of divestitures, contribution to net revenue growth | FY2026 | ≈+1.5% | ≈+1% | raised |
| Net revenue growth | FY2026 | ≈+6% | +4% to +6% | narrowed |
| Core annual effective tax rate, non-GAAP | FY2026 | ≈21% | ≈22% | lowered |
| Core constant currency EPS growth, non-GAAP | FY2026 | +1% to +2% | Low-end of +4% to +6% | lowered |
| Core EPS growth, non-GAAP | FY2026 | +2.5% to +3.5% | Low-end of +5% to +7% | lowered |
| Capital spending | FY2026 | Below 5% of net revenue | Below 5% of net revenue | reaffirmed |
| Free cash flow conversion ratio | FY2026 | At least 80% | At least 80% | reaffirmed |
| Cash returns to shareholders | FY2026 | $8.9B | $8.9B | reaffirmed |
Investor Takeaways
- Track full-year performance against the revised core EPS and core constant currency EPS growth outlooks, alongside the approximately 6% net revenue growth estimate.
- PepsiCo said it is identifying additional structural cost reductions for implementation in the coming months; North American performance and the ability to fund planned growth investments are key execution points.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3