PepsiCo’s (PEP) Q1 2026 earnings

PepsiCo On Thursday, it reported quarterly profit and revenue that beat analysts’ expectations as its struggling North American food business announced a return to volume growth.

The company’s shares rose 2% in afternoon trading.

Here’s what PepsiCo reported compared to what Wall Street was expecting, based on a poll of analysts conducted by LSEG:

• EPS: $1.61 was revised versus $1.55 expected
• profit: $19.44 billion versus $18.94 billion expected

Pepsi reported first-quarter net income attributable to the company of $2.33 billion, or $1.70 per share, up from $1.83 billion, or $1.33 per share, a year earlier.

Excluding items including restructuring and divestitures, the company had earnings of $1.61 per share.

Net sales Its shares rose 8.5% to $19.44 billion, boosted by its acquisition of Poppi, new distribution of energy drink Alani Nu and the divestment of Rockstar. PepsiCo’s organic revenue, which excludes acquisitions, divestitures and currency fluctuations, rose 2.6%.

For the first time in more than two years, Pepsi’s North American foods business reported an increase in volume. The division, a combination of Frito-Lay and Quaker Oats’ North American units, has faced opposition from consumers due to a spike in prices when inflation spikes in 2022.

In February, Pepsi cut prices on Lay’s, Tostitos, Doritos and Cheetos by up to 15% to try to win back shoppers, and several retailers rewarded the company by giving them more shelf space. The efforts are already paying off.

Pepsi’s North American Foods business reported volume growth of 2% during the quarter. The measure does not include price fluctuations and foreign exchange rates to more accurately reflect demand.

“We feel good about where we are at this stage of the journey,” CEO Ramon Laguarta said on the company’s earnings conference call. “However, in the process of resetting all the shelves and launching innovation – I would say that by the end of the second quarter, we will probably be almost done with that process. But the early reads are very exciting.”

The company’s North American beverage business reported volume was down 2.5%. The division, which includes its namesake soda drinks, Starry and Poppi, also faced weak demand as a result of higher prices.

PepsiCo said Thursday it will revive the Gatorade brand in an effort to boost sales of the sports drink. The company plans to market the hydration benefits of Gatorade to non-athletes, release a lower-sugar version and begin removing artificial colors, among other changes.

PepsiCo is also leaning into snack and beverage trends, especially those higher in protein and fiber. Recent releases include Pepsi Prebiotic, Starbucks Coffee & Protein, Doritos Protein, and SunChips Fiber.

Outside the United States, Pepsi’s international business is growing more rapidly. The company’s Asia Pacific and EMEA food divisions recorded volume growth of 9%.

Globally, PepsiCo has so far seen no signs of consumers pulling back on spending in response to rising fuel prices due to the war, Laguarta said on CNBC’s “Squawk on the Street.”

In the short term, the US conflict with Iran has increased sales in some markets, according to Laguarta. He credited PepsiCo’s strong supply chain, which has kept drinks and snacks stocked while some of its peers struggled to adapt.

For the full year, Pepsi reiterated its previous forecast that organic revenues would rise between 2% and 4% and constant currency earnings per share would increase in a range of 4% to 6%. He pointed out that forecasting the global economy has become more difficult due to the war in the Middle East.

“As we look to the future, the macroeconomic environment has become more volatile and uncertain due to ongoing geopolitical conflicts,” the executives said in prepared remarks. “Systematic hedging programs for market-traded commodities are expected to provide some near-term protection and visibility on some input costs.”