PepsiCo reported higher third-quarter profit and sales this week, posting revenue that beat Wall Street estimates as an overhaul of its North American snack and beverage business continued to show results — even as the company trimmed its profit growth outlook for the rest of the year.
Net revenue rose 5.6% to $25.27 billion, above the roughly $24.95 billion analysts had expected, according to Dow Jones data cited by Morningstar. Organic revenue — which strips out currency effects, acquisitions and divestitures — grew 3.1%. Core earnings per share came in at $2.34, ahead of the FactSet consensus of $2.29, while reported EPS rose to $2.23 from $1.90 a year earlier, according to the company's third-quarter earnings release filed with the SEC.
International Strength, Domestic Caution
The results reflect the uneven progress of a turnaround PepsiCo's management has pushed for more than a year, after a stretch of weak North American snack volumes and pricing pushback from cost-conscious shoppers. International organic revenue grew 8% in the quarter, the company's strongest growth engine, while North America improved sequentially even though lower effective pricing within the food business partly offset the gains.
The quarter caps a year in which PepsiCo has leaned harder into repricing, portfolio pruning and cost discipline to win back value-conscious shoppers who had traded down to private-label snacks and drinks after several years of steep price increases. Thursday's numbers suggest that effort is gaining traction abroad faster than at home, where the North American food business in particular continues to lag the rest of the portfolio.
Despite the top-line beat, PepsiCo trimmed its outlook for the rest of the year. The company narrowed its full-year organic revenue growth guidance to around 3%, down from a prior range of 2% to 4%, and lowered its core earnings growth forecast to a range of 2.5% to 3.5%. The guidance cut suggests management still sees pressure on margins and consumer spending heading into the fourth quarter, even as the beat on revenue and profit offered some reassurance that pricing and portfolio changes are gaining traction internationally.
Investors parsed the mixed signals — a beat against a more cautious outlook — against a backdrop of a broader stock market that closed out last week just shy of its own record highs. PepsiCo's next quarterly update, covering the holiday-heavy fourth quarter, is expected in early 2027.