PepsiCo cuts earnings forecast as North American turnaround takes longer than expected

PepsiCo on Thursday reported quarterly earnings and revenue that topped analysts' expectations, fueled by international growth as its North American business continues to lag.

With one quarter left in 2026, the company also lowered its forecast for its full-year earnings, as its struggles in its home market weigh on profits. Pepsi expects core earnings per share to increase 2.5% to 3.5%, down from its previous projection of the low end of a range from 5% to 7%. It is also now projecting net revenue growth of about 6%, on the high end of its prior outlook of a range of 4% to 6%.

Pepsi reported third-quarter net income attributable to the company of $3.05 billion, or $2.23 per share, down from $2.6 billion, or $1.90 per share, a year earlier.

Net sales rose 5.6% to $25.27 billion. Organic revenue, which excludes acquisitions, divestitures and foreign exchange, increased 3.1% during the quarter.

Pepsi reported volume growth of 3% for its beverages and 1% for its food for the quarter. Volume excludes pricing and currency fluctuations to reflect demand more accurately.

The company's international markets were once again the bright spot. Pepsi's international business has accounted for 41% of the company's net revenue so far this year, CEO Ramon Laguarta said in prepared remarks.

Pepsi saw volume growth in all but one of its international business units during the quarter. Only its convenient foods division in Europe, the Middle East and Africa reported declining volume, of 1%.

"Our business in North America performed below our expectations and represents a meaningful opportunity for improvement," Laguarta said.

Its North American beverage unit saw volume shrink 2%, while its North American food division reported flat volume.

The turnaround of its domestic business is moving more slowly than expected, CFO Steve Schmitt said in prepared remarks. So far, the strategy to fix the struggling divisions has focused on innovation and the company's advertising and marketing.

For its snacks, Pepsi has leaned into simpler ingredients, "alternative" oils and functional benefits, like protein and fiber. Its drink business will continue to stay focused on functional hydration, flavored soft drinks, energy drinks and zero-sugar options.

However, Laguarta shared green shoots showing that the company's efforts are working.