PepsiCo beats Q3 estimates but cuts 2026 profit growth outlook

The company raised its revenue growth forecast for fiscal 2026 while lowering how fast core earnings per share will grow

PepsiCo reported third-quarter earnings per share of $2.34, two cents above estimates, on revenue of $25.27bn, above the $25.23bn expected.

The company raised its fiscal 2026 net revenue growth guidance to about 6%, from a prior range of 4% to 6%, and lifted organic revenue growth guidance to about 3%, from 2% to 4%. It also raised the expected benefit to revenue and core EPS growth from foreign exchange translation to about 1.5%, from about 1%, and from acquisitions net of divestitures to about 1.5%, from about 1%. Its core effective tax rate for fiscal 2026 is now expected at about 21%, down from about 22%.

At the same time, PepsiCo lowered its core EPS growth guidance for fiscal 2026 to a range of 2.5% to 3.5%, from the low end of a prior 5% to 7% range, and cut its core constant currency EPS growth guidance to 1% to 2%, from the low end of 4% to 6%. Chairman and chief executive Ramon Laguarta said the company is identifying additional structural cost reduction actions to fund investment in North America innovation and marketing while mitigating rising input cost inflation.

The cut follows a downgrade from JPMorgan on September 29, which flagged that price increases PepsiCo announced in late September on chips, dips and soda would not be enough to offset rising input costs. The new guidance bears that out: revenue growth is holding up, but profit growth is weaker than previously signaled, and PepsiCo is now counting on cost cuts rather than pricing to fund its North America investment plans. That leaves open how much further cost-cutting can absorb before those investment plans get scaled back too.