PepsiCo shares climb after Q3 beat, though company trims profit forecast
Investing.com -- PepsiCo shares climbed more than 1% in premarket trading Thursday after the snacks and beverage maker reported third-quarter earnings and revenue that topped Wall Street estimates, though it lowered its full-year profit outlook.
Core earnings per share came in at $2.34, ahead of the $2.30 analysts expected. Net revenue rose 5.6% to $25.27 billion, above the $24.97 billion consensus, while organic revenue growth accelerated to 3.1%, with volume gains in both beverages and convenient foods.
Core operating profit rose 3% to $4.28 billion, but core operating margin narrowed 35 basis points to 16.9%. PepsiCo said a 4-percentage-point benefit from tariff refunds helped core operating profit, offset in part by higher operating costs and increased advertising and marketing spending.
The company now expects core constant-currency EPS growth of 1% to 2% for the year, down from prior guidance of the low end of a 4% to 6% range. It expects core EPS growth of 2.5% to 3.5%, down from the low end of 5% to 7%.
PepsiCo narrowed its organic revenue growth forecast to about 3%, from a range of 2% to 4%, compared with an analyst estimate of 2.5%. It raised its net revenue growth forecast to about 6%, from 4% to 6%, helped by currency and acquisitions. The company left its planned shareholder returns unchanged at $8.9 billion.
North America remained the weak spot. Convenient foods revenue trends improved from the prior quarter, with savory snack volume growth and market share gains offset by lower pricing, while beverages revenue rose 5%, mostly on acquisitions made in 2025. International businesses performed well, with each segment posting strong revenue growth.
Chairman and Chief Executive Ramon Laguarta said the company is "acting with urgency to sustainably improve our performance in North America" through more investment in innovation, brand building and sharper execution by sales channel. He said PepsiCo is identifying additional structural cost cuts to fund growth investments and offset rising input costs, to be implemented in the coming months.