PepsiCo Earnings Preview: Can North America Recovery Lift PEP Stock?

Key Takeaways

• PepsiCo will publish its third-quarter results on October 8 at approximately 6:00 a.m. EDT, followed by an analyst call at 8:15 a.m.
• Wall Street expects adjusted earnings of $2.30 per share and revenue of approximately $24.96 billion.
• North American snack and beverage volumes will be more important than the headline earnings beat or miss.
• Rising commodity, packaging and freight expenses could limit margin growth as PepsiCo balances affordability with selective price increases.
• Options markets imply a move of approximately 3.5% in PEP stock following the report.

PepsiCo will report its fiscal third-quarter results before the US market opens on Thursday, with investors looking for evidence that its struggling North American business is beginning to stabilize.

The company is expected to deliver modest revenue growth but almost no increase in adjusted earnings. Wall Street’s attention will therefore focus on sales volumes, pricing, profit margins and management’s progress in restoring demand for brands such as Pepsi, Mountain Dew, Lay’s, Doritos and Gatorade.

PEP stock closed 1.6% lower at $123.73 on Wednesday. The shares have fallen approximately 14% in 2026 and are almost 28% below their February 52-week high of $171.48, reflecting concerns about weakening US demand, rising costs and the pace of PepsiCo’s turnaround.

When Will PepsiCo Report Earnings?

PepsiCo will publish its third-quarter earnings materials at approximately 6:00 a.m. EDT on October 8. Chairman and CEO Ramon Laguarta and Chief Financial Officer Steve Schmitt will hold a live question-and-answer session with analysts at 8:15 a.m. EDT.

The quarter ended on September 5, 2026. PepsiCo will release its press statement, Form 10-Q and prepared management remarks through its investor-relations website.

The main consensus estimates are:

An earnings beat alone may not be enough to produce a lasting rally. Investors will want to see that growth is being supported by improving demand rather than acquisitions, currency movements or additional price increases.

North America Is the Main Test

PepsiCo’s international operations have continued to expand, but its North American divisions remain under pressure.

In the second quarter, PepsiCo Foods North America reported a 2% decline in revenue. Organic revenue also fell 2%, even though volumes were approximately flat. Lower effective pricing, including affordability initiatives and promotional spending, reduced sales.

PepsiCo Beverages North America generated reported revenue growth of 7%, but acquisitions contributed six percentage points. Organic revenue increased only 1%, while beverage volume fell 4%.

The contrast illustrates PepsiCo’s central challenge. The company needs to make products more affordable to protect volumes, but reducing prices and increasing promotions can weaken revenue and margins.

Recent retail data have not provided clear evidence of a recovery. Deutsche Bank estimated that PepsiCo Foods North America’s organic revenue may decline approximately 0.5% in the third quarter. The bank expects organic growth of around 1.5% from PepsiCo Beverages North America.

US measured-channel consumption excluding the recently acquired Alani Nu brand reportedly declined 0.8% during the quarter, including a 0.9% decrease for North American foods and a 0.6% decline for beverages.

A stronger result would indicate that PepsiCo’s affordability programs, smaller package sizes and product innovations are beginning to attract price-sensitive consumers. Another quarter of falling volumes could raise doubts about whether the turnaround is progressing quickly enough.

Can PepsiCo Restore Snack Demand?

PepsiCo has reduced prices and increased promotional activity for several major snack brands, including Lay’s, Doritos and Cheetos.

The company has also introduced smaller packages and meal bundles to reach consumers who are limiting discretionary purchases. Management previously said that higher gasoline prices and economic uncertainty had reduced impulse purchases at convenience stores and fuel stations.

These initiatives helped PepsiCo’s North American convenient-foods division gain volume market share during the second quarter. However, lower pricing meant that revenue still declined.

PepsiCo is now redesigning its US portfolio. The company plans to eliminate approximately 20% of its products, reduce supply-chain complexity and direct investment toward brands and formats with stronger growth potential.

Investors will watch for progress in three areas:

• Whether Lay’s, Doritos and Cheetos volumes improved sequentially;
• Whether smaller packages and value offerings attracted budget-conscious shoppers;
• Whether reducing the number of products lowered manufacturing and distribution costs.

The company is also responding to changing consumer preferences by introducing products with more protein, fiber, hydration benefits and reduced sugar. Examples include Doritos Protein and Gatorade Lower Sugar.

These launches may improve PepsiCo’s position in faster-growing health and wellness categories, but they are unlikely to transform the company’s overall growth rate immediately. Traditional snacks and carbonated beverages still account for a substantial portion of sales and profits.

Beverage Volumes Remain Under Pressure

PepsiCo’s North American beverage business will be another important part of the report.

Second-quarter beverage volume declined 4%, despite reported revenue growth supported by acquisitions. Consumers continued to reduce purchases of traditional carbonated drinks, while high prices and economic uncertainty affected convenience-store traffic.

The company has attempted to offset those pressures through zero-sugar products, energy drinks, sports hydration and functional beverages.

Its acquisition of Poppi expanded PepsiCo’s exposure to prebiotic soda, while Alani Nu strengthened its position in energy drinks. The challenge is determining how much growth from these acquired businesses can offset weakness across established brands.

Investors should distinguish between reported revenue and organic performance. Strong headline growth generated by acquisitions would provide less evidence of a genuine North American recovery than higher volumes and organic sales from PepsiCo’s existing portfolio.

Rising Costs Could Limit Margin Growth

PepsiCo’s affordability strategy is becoming more difficult as input costs increase.

The company reduced prices and expanded promotions to stimulate demand, but higher commodity, packaging and freight expenses have since forced it to raise prices across parts of the portfolio.

Additional price increases may protect profitability but risk placing more pressure on volumes. Consumers have already become more selective after several years of food and beverage inflation.

In the second quarter, PepsiCo’s core operating profit increased 4%, but its core operating margin contracted by 40 basis points. Productivity savings and effective pricing partly offset higher operating costs.

For the third quarter, investors will examine:

• Gross and operating margin changes;
• Commodity, transport and packaging inflation;
• Savings from supply-chain restructuring;
• Marketing and promotional expenses;
• Management’s pricing plans for the fourth quarter.

A combination of stable volumes and better margins would offer the strongest evidence that the turnaround is working. Margin growth produced only through aggressive cost reductions would be less convincing if sales remain weak.

International Growth Could Offset US Weakness

PepsiCo’s international operations have been a source of resilience.

During the second quarter, Europe, the Middle East and Africa delivered 6% organic revenue growth. Asia-Pacific Foods produced 9% organic growth, while International Beverages Franchise recorded an increase of 9%.

International performance benefited from higher volumes, pricing and product launches tailored to local markets. Promotional activity connected to major sporting events also supported demand.

This geographic diversification reduces PepsiCo’s dependence on the United States. However, international growth cannot fully resolve concerns about North America because the US businesses remain among the company’s largest and most profitable operations.

Investors will therefore assess whether international expansion is generating sufficient operating profit to compensate for weaker performance at PepsiCo Foods North America.

Will PepsiCo Maintain Its 2026 Guidance?

PepsiCo previously reaffirmed its full-year forecast, including:

• Organic revenue growth of 2% to 4%;
• Core constant-currency EPS growth of 4% to 6%;
• Capital expenditure below 5% of revenue;
• Free cash flow conversion of at least 80%;
• Approximately $8.9 billion of shareholder returns;
• $7.9 billion in dividends and $1 billion in share repurchases.

The company also expected currency movements to add approximately one percentage point to reported revenue and core EPS growth. Acquisitions completed in 2025 were forecast to contribute another percentage point to reported revenue growth.

Maintaining the guidance would suggest PepsiCo still expects productivity improvements and international growth to offset North American weakness.

A reduction would probably place PEP stock under additional pressure, particularly because consensus already reflects limited earnings growth. An increase appears less likely unless third-quarter volumes and margins improve substantially.

Management’s language may be as important as the formal forecast. Investors will listen for indications that results are likely to finish near the upper or lower end of the ranges.

How Could PepsiCo Earnings Move PEP Stock?

Options markets imply that PepsiCo shares could move approximately 3.5% in either direction following the report. That compares with an average peak earnings-day move of about 3% over the previous decade.

The bullish scenario would include:

• Revenue and adjusted EPS above consensus;
• Improving North American snack and beverage volumes;
• Stable or expanding core margins;
• Reaffirmed guidance with confidence in the middle or upper end;
• Evidence that recent acquisitions are adding profitable growth.

Those results could help PEP stock recover toward $128 to $130.

The bearish scenario would include:

• Continued declines in North American volumes;
• Growth driven primarily by acquisitions and currency;
• Additional price increases without improved demand;
• Margin pressure from commodities, freight and promotions;
• A reduction in full-year revenue or earnings guidance.

A disappointing report could send the stock toward $120, which would place it near its lowest level since 2020.

Analysts remain divided. Of the nine analysts tracked by Visible Alpha before the report, three rated PepsiCo a buy, five were neutral and one recommended selling. The average price target was $147, while UBS maintained a buy rating but reduced its target from $159 to $145.

Can North America Recovery Lift PEP Stock?

PepsiCo’s valuation already reflects considerable pessimism. The stock has lost almost 28% from its February high, while the company continues to generate substantial cash flow and return capital through dividends and share repurchases.

That creates the potential for a relief rally if North American volumes stabilize and management maintains its annual guidance.

However, the company must demonstrate that its recovery is based on sustainable demand. Revenue growth driven by acquisitions, currency translation or higher prices would not fully address concerns about declining consumption of traditional snacks and soft drinks.

The most important figures will therefore be organic revenue, North American volumes and core operating margins—not simply the headline EPS result.

PepsiCo does not need to deliver spectacular growth to lift PEP stock. It does need to show that the deterioration in its largest market is slowing and that its affordability, innovation and cost-saving programs can rebuild growth without sacrificing profitability.

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