PepsiCo (NASDAQ: PEP) trims outlook as sales and EPS rise in quarter

What happened

PepsiCo, Inc. (NASDAQ: PEP) reported third-quarter 2026 net revenue of $25.27 billion, up 5.6% from a year earlier.

EPS rose 17% to $2.23 and operating profit increased 19% to $4.26 billion.

For the first 36 weeks, net revenue rose 6.7% to $68.90 billion and EPS rose 47% to $6.10.

The company said its third-quarter results featured strong net revenue growth and an acceleration in organic revenue growth with organic volume growth across both global beverages and convenient foods.

PepsiCo updated fiscal 2026 guidance to approximately +3% organic revenue, approximately +6% net revenue, core constant currency EPS growth of +1% to +2%, and core EPS growth of +2.5% to +3.5%.

Cash returns to shareholders remain at $8.9 billion, including dividends of $7.9 billion and share repurchases of $1.0 billion.

Key numbers

Metric Latest Change Source
Q3 net revenue $25.27 billion from $23.94 billion, +5.6% SEC 8-K
Q3 operating profit $4.26 billion from $3.57 billion, +19% SEC 8-K
Q3 EPS $2.23 from $1.90, +17% SEC 8-K
36 weeks net revenue $68.90 billion from $64.58 billion, +6.7% SEC 8-K
36 weeks EPS $6.10 from $4.15, +47% SEC 8-K

Read more: PepsiCo (PEP) stock analysis and investment case

Why it matters

Net revenue increased by $1.34 billion from a year earlier, and EPS rose from $1.90 to $2.23.

The filing says third-quarter operating profit increased 19% and operating margin expanded 195 basis points.

That line was driven mainly by a favorable net impact of acquisition and divestiture-related charges credits and net mark-to-market gains on commodity derivatives.

Core operating profit rose 3% and core operating margin contracted 35 basis points.

The core result reflects productivity savings, effective net pricing and a 4-percentage-point favorable impact of tariff refunds.

Year to date, operating profit increased 45% and operating margin expanded 440 basis points.

The filing ties that to prior-year impairment charges related to the Rockstar and Be Cheery brands and a favorable net impact of acquisition and divestiture-related charges credits.

The company also said additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investment and mitigate rising input cost inflation.

OptimistFi's case is that PepsiCo can convert scale, pricing and productivity into steady cash generation.

This filing is mixed because sales and EPS improved, but core margin slipped and guidance moved lower.

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What's next

At approximately 6:00 a.m. Eastern time on October 8, 2026, PepsiCo will post prepared management remarks on its website.

At 8:15 a.m. Eastern time, the company will host a live question and answer session with investors and financial analysts.

Those events are the next dated tests of the new guidance and the planned cost actions.

Support for the new guidance would strengthen the case, while softer answers on margin or execution would weaken it.

More from OptimistFi

Sources

Read the full OptimistFi thesis on PepsiCo, Inc.: https://optimistfi.com/stocks/PEP

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Browse every company OptimistFi covers at optimistfi.com/stocks, or read the latest evidence-first research.

The full PepsiCo, Inc. investment case, its status and the next test to watch live on the PepsiCo, Inc. thesis page.

Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.