PepsiCo Reduces 2026 Earnings Forecast as North American Revival Stagnates
PepsiCo (NASDAQ: PEP) has revised its earnings forecast for the full year of 2026, alerting investors that the recovery of its crucial North American business is progressing slower than anticipated. This comes despite the company surpassing Wall Street’s third-quarter estimates.
The food and beverage behemoth, which owns brands such as Pepsi, Lay’s, Gatorade, and Doritos, announced a Q3 net revenue of $25.27 billion, a 5.6% increase year-on-year. The adjusted earnings per share stood at $2.34, exceeding analyst predictions of $2.29. However, PepsiCo significantly reduced its core EPS growth forecast for fiscal 2026 to a mere 2.5%–3.5%, a drastic decline from the previous guidance of growth at the lower end of a 5%–7% range.
CEO Ramon Laguarta conceded that North America’s performance fell short of expectations, indicating a significant area for enhancement. The volume of North American beverages decreased by 2% in the quarter, while the volume of convenient foods remained stagnant. This stagnation occurred even after PepsiCo reduced the prices of Lay’s and Doritos by up to 15% in an attempt to stimulate demand.
The company is currently navigating a challenging landscape shaped by inflation-wary consumers, escalating input costs, and intensifying competition from GLP-1 weight-loss drugs impacting snack consumption. PepsiCo’s core operating margin fell 35 basis points in Q3 compared to the same period last year. CFO Steve Schmitt confirmed that further structural cost-reduction measures will be implemented in the upcoming months.