PepsiCo reported fourth-quarter results on Feb. 3, 2026, beating analysts’ estimates as beverage sales strengthened across multiple regions. Adjusted earnings per share were $2.26 versus $2.24 expected, and consolidated revenue reached $29.34 billion compared with $28.97 billion forecast. Net income attributable to the company was $2.54 billion, or $1.85 per share, up from $1.52 billion a year earlier. Management flagged persistent volume pressure in North America but said price adjustments and productivity gains are part of a plan to restore competitiveness.
Key Takeaways
- Adjusted EPS: $2.26 vs. $2.24 expected, according to an LSEG analyst survey.
- Total revenue: $29.34 billion, a 5.6% increase year-over-year from net sales.
- Organic revenue rose 2.1% in the quarter after stripping out FX, M&A and divestitures.
- Company net income: $2.54 billion, or $1.85 per share, up from $1.52 billion ($1.11 per share) a year earlier.
- Global volumes: food volumes fell 2% while drink volumes edged up 1% in the quarter.
- North America: Foods volume down 1%; Beverages volume down 4% though NA beverage organic sales rose 2%.
- Guidance reiterated for 2026: organic revenue growth of 2%–4% and core constant-currency EPS growth of 4%–6%.
- Corporate actions: December deal with Elliott Investment Management commits to a 20% U.S. product-line reduction, cost cuts and lower snack prices.
Background
PepsiCo operates across snacks, beverages and other packaged foods, and its performance often reflects shifts in consumer spending and commodity costs. Since 2022–2023, inflation and higher grocery prices have pressured purchase frequency for many consumer-packaged goods, and PepsiCo has repeatedly cited softer volumes in its home market. Activist investor Elliott Investment Management disclosed a roughly $4 billion stake and reached an agreement with PepsiCo in December 2025 that sought faster cost reductions and a slimmer U.S. assortment.
The Elliott agreement required no board seats but pushed PepsiCo to promise a 20% reduction in the U.S. product lineup, lower snack prices to drive repeat purchases and broader cost-cutting across food and beverage operations. Management says productivity savings will offset some of the margin impact from price reductions. That strategy arrives as competitors and retailers also adjust promotional activity and assortment, raising the stakes for restoring volume growth in North America.
Main Event
On Feb. 3, 2026, PepsiCo posted adjusted EPS of $2.26 and revenue of $29.34 billion, outperforming LSEG-consensus expectations of $2.24 and $28.97 billion, respectively. Net sales grew 5.6% year-over-year, and organic revenue increased 2.1% after excluding foreign exchange, acquisitions and disposals. The company reported net income attributable of $2.54 billion, or $1.85 per share, compared with $1.52 billion, or $1.11 per share, in the prior-year quarter.
Segment results showed mixed demand: global food volumes fell 2% while beverage volumes rose 1% overall. In North America, Foods volumes declined about 1% and Beverages volumes fell about 4%, even as North America beverage organic sales increased 2% — indicating pricing and mix partially compensated for weaker unit demand. Management said the North American market remains the weakest geography but is showing early signs of improvement.
Executives reiterated the previously issued 2026 outlook: organic revenue growth of 2% to 4% and core constant-currency EPS growth in a 4% to 6% range. The company attributed the better-than-expected quarter to improving organic sales trends across both North America and international businesses while noting that unit-demand metrics still lagged. Shares slipped more than 1% in premarket trading after the release, reflecting investor focus on near-term volume trends and the cost of planned price adjustments.
Analysis & Implications
PepsiCo’s results illustrate a tension common to large consumer packaged-goods firms today: raising prices preserved revenue and helped margins but eroded purchase frequency. The company’s plan to reduce certain U.S. prices aims to reverse that dynamic, but success depends on how quickly lower prices restore volume without eroding overall profit growth. Management is counting on productivity and other cost savings to offset the margin impact, but those savings must materialize at scale and on a reliable timetable.
International markets provided a relative buffer, with resilience in several geographies helping lift overall organic revenue growth to 2.1%. That geographic balance gives PepsiCo room to prioritize competitiveness in North America while maintaining investments abroad. Still, persistent volume declines in the U.S. beverage and snack portfolios underscore the fragility of demand among inflation-weary consumers.
The pact with Elliott accelerates structural changes — a leaner U.S. assortment and explicit price reductions — that could improve purchase frequency but compress near-term margins. If PepsiCo hits its productivity targets, the hit to core EPS could be modest; if not, margin pressure would likely increase. Investors will watch upcoming quarterly updates for evidence that volume trends are stabilizing and that cost programs are delivering the promised offsets.
Comparison & Data
| Metric | Reported | Street Expectation (LSEG) |
|---|---|---|
| Adjusted EPS | $2.26 | $2.24 |
| Total Revenue | $29.34B | $28.97B |
| Net Income | $2.54B ( $1.85/share ) | N/A |
| Net Sales Growth | +5.6% | N/A |
| Organic Revenue Growth | +2.1% | N/A |
| Global Food Volume | -2% | N/A |
| Global Drink Volume | +1% | N/A |
The table highlights where PepsiCo cleared expectations on EPS and revenue while showing persistent unit-demand weakness in key categories. Organic revenue growth slowed relative to headline net sales growth, reflecting the role of pricing and mix. The volume metrics (food -2%, drinks +1%) provide the clearest measure of consumer demand trends, and North America-specific declines suggest the U.S. will remain the principal focus for management actions this year.
Reactions & Quotes
“Fourth-quarter results reflected a sequential acceleration in reported and organic revenue growth, with improvements in both the North America and International businesses,”
Ramon Laguarta, CEO, PepsiCo (prepared statement)
“We plan to lower prices on products from our North America food division to improve competitiveness and purchase frequency, and we expect productivity savings to offset the reductions,”
PepsiCo executives (prepared remarks)
Market participants reacted to the report by parsing volume trends against the company’s guidance and the implementation timeline for the Elliott-related plan. Analysts will be watching upcoming sales data and quarterly updates to gauge whether lower prices translate into sustained volume recovery.
Unconfirmed
- The precise timing and magnitude of productivity savings sufficient to fully offset the planned North America price cuts remain unverified.
- The extent to which a 20% U.S. product-line reduction will lift purchase frequency across different retail channels is not yet proven.
- Whether volume trends in North America will stabilize in the next quarter following price adjustments is still uncertain.
Bottom Line
PepsiCo beat Street expectations on the headline numbers for Q4 2025, driven by stronger organic sales and beverage gains outside the U.S. Yet unit-demand weakness, especially in North America, underscores that headline revenue growth still relies in part on pricing. The company’s strategy — lower select U.S. prices, tighten assortment and pursue productivity gains — targets a restoration of purchase frequency but carries execution risk.
Investors should watch next-quarter volume trends, the pace of announced cost savings and early retail responses to the assortment and price changes. If volumes recover while productivity offsets margin pressure, PepsiCo could deliver on its 2026 outlook; if not, the company may face renewed investor scrutiny and near-term margin erosion.