PepsiCo Q3 2026 earnings: narrow beat as sales growth accelerates
PepsiCo narrowly topped Wall Street's sales and profit targets, with revenue growth accelerating and volumes improving, even as North America remained a work in progress.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $2.34 | $2.32 | +0.9% |
| Revenue | $25.27B | $25.23B | +0.2% |
Key takeaways
- PepsiCo’s sales and its “core” profit per share — a figure that strips out one-time items like restructuring charges — both came in just slightly ahead of what Wall Street analysts had expected for the quarter, a narrow beat rather than a blowout.
- Total revenue grew 5.6% from a year earlier, and “organic” revenue — growth from selling more or pricing higher, excluding currency swings and deals — rose 3.1%, which the company described as an acceleration from recent quarters.
- CEO Ramon Laguarta said the quarter showed organic volume growth across both PepsiCo’s global beverage business and its snacks and foods business, meaning more units are moving off shelves rather than growth coming only from price increases.
- Laguarta singled out North America, PepsiCo’s biggest market, as a continued focus area, pointing to stepped-up spending on new products, brand marketing and sharper execution with retailers to win back shoppers.
- Within North American beverages, revenue rose roughly 5%, but that came mainly from pricing and recent acquisitions and divestitures rather than more drinks sold — unit volume actually fell about 2%, with both soda and non-carbonated drinks down.
- Operating profit in that beverage unit jumped sharply, but the gain was boosted by one-off items, including charges tied to last year’s Poppi soda-brand deal and tariff-related refunds, alongside ongoing cost-cutting.
- Management said it is identifying further structural cost cuts to help fund growth investments and offset rising input costs, signaling that cost pressure remains a watch item even as sales trends improve.
- Over the past year, PepsiCo kept roughly 14.5 cents of operating profit for every dollar of sales, a margin that has held up even as the company has spent more on marketing and new products — a sign it has been managing costs while chasing growth.
Q3 2026 in context
| Metric | Sep 2026 | Sep 2025 | Change |
|---|---|---|---|
| Revenue | $25.3B | $23.9B | +5.6% |
| Net income | $3.0B | $2.6B | +17.1% |
| Free cash flow | $4.7B | $3.5B | +34.2% |
| Diluted EPS | $2.23 | $1.90 | +17.4% |
| Gross margin | 54.4% | 53.6% | +0.8 pts |
| Operating margin | 16.9% | 14.9% | +1.9 pts |
| Net margin | 12.1% | 10.9% | +1.2 pts |
Figures for the quarter ended Sep 2026 and the quarter ended Sep 2025, as reported to the SEC.
How the stock took it
PepsiCo Inc closed at $123.73 on Oct 7, 2026, the last session before the report, and at $125.97 on Oct 9, 2026, the first session after it — +1.8% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 54.2% | Trailing 12 months |
| Operating margin | 14.5% | Trailing 12 months |
| Net profit margin | 10.8% | Trailing 12 months |
| Pretax margin | 13.6% | Trailing 12 months |
| EPS | $7.62 | Trailing 12 months |
| Revenue growth (YoY) | 5.6% | Trailing 12 months |
| EPS growth (YoY) | 38.9% | Trailing 12 months |
| Return on equity | 50.2% | Trailing 12 months |
Sources: company report