PURCHASENY. — Innovation efforts in food and beverages set the tone for a solid fiscal 2026 start as PepsiCo Inc. beat Wall Street’s high-end forecast for earnings and revenue in the first quarter.
For the 12-week quarter ended March 21net income climbed 27% to $2.33 billionequal to $1.70 per share on the common stockfrom $1.83 billionor $1.33 per sharea year earlier. Excluding restructuring/impairment and acquisition/divestiture-related charges and mark-to-market net impactcore net earnings were $2.2 billionor $1.61 per shareversus $2.03 billionor $1.48 per sharea year agoPurchase-based PepsiCo said. Analysts’ top-end estimate was for adjusted earnings per share of $1.56.
Total net revenue for the quarter rose 9% to $19.44 billion from $17.92 billion a year ago and was up 2.6% on an organic basis. At the high endanalysts had projected revenue of $19.21 billion.
“PepsiCo delivered strong results for the first quarter of 2026,” Ramon Laguartachairman and chief executive officersaid in remarks on the quarterly performance. “Net and organic revenue growth accelerated sequentially for the International and North America businesses.”
A 9% gain in core EPS reflected record productivity savingswhile at the top lineeach business segment generated organic growthincluding the 20th straight quarter of at least mid-single-digit organic revenue growth for the International unitLaguarta said.
“We believe the commercial actions in place to improve performance aided resultsincluding the restaging of certain global brandsan expansive slate of innovation with emerging and functional offeringsand improved affordability initiatives in certain areas of the portfolio,” he said.
In North Americathe beverages segment led the way in the first quarter. Revenue for Pepsi Beverages North America (PBNA) surged 9% year over year to $6.39 billion. Organicallyrevenue grew 2% on a 6% increase in net pricing and a 4% decrease in volume.
“Acquisitionsnet of divestiturescontributed 7 percentage points to net revenue growthreflecting the distribution of Alani Nu (energy drinks) and the acquisition of (prebiotic soda brand) poppipartially offset by the transition of the case pack water business in North America to a third‐party partner and the divestiture of (energy drink) Rockstar,” Laguarta said.
“Functional hydration offerings delivered strong performance as they continue to resonate well with consumers,” he noted.
Gatorade generated volumenet revenue and unit share growth in the quarterfueled by Gatorade Zero Sugar and Gatorlyte.
“In additionwe are restaging Gatorade products with improved/simplified visuals on packagesmore brand communication on hydration benefits and product superiority attributes and gradually removing artificial colors within the portfolio,” Laguarta said.
Propel hydration beverages kept up revenue and unit sales growth as well as gained volume share in enhanced waterhe saidadding that the brand’s retail sales have more than doubled since 2019 to over $1 billion. PepsiCo also successfully integrated the fast‐growing Alani Nu brand into the direct-store delivery system via its partnership with Celsius Holdingshe said.
PepsiCo said investments to make its food products more affordable lifted quarterly results.
| Photo: ©JETCITYIMAGE – STOCK.ADOBE.COM“Looking aheadwe expect to expand the presence and availability of on‐trend innovations recently introduced — including Pepsi PrebioticGatorade Lower Sugara newly formulated Muscle MilkStarbucks Coffee & ProteinPure Leaf Mental Focus and Dirty Mountain Dew Cream Soda — and amplify communications with consumers as the year progresses,” Laguarta said.
In PepsiCo Foods North America (PFNA)which includes Frito‐Lay and Quaker Foodsfirst-quarter net revenue rose 2% to $6.33 billion and was up 1% on an organic basisimproving from a 1.5% revenue increase and a 1% decrease organically in the previous quarter. The first-quarter organic revenue uptick reflected a 2% volume gain and a 1% net pricing decline.
“PepsiCo Foods North America delivered both volume and net revenue growth in the first‐quarter as the business implemented affordability investments and brought more innovation into the marketplace,” Laguarta said.
He cited brand refreshes for Tostitos and Quaker and the launch of better-for-you products such as Doritos ProteinGood Warrior beef sticksSmartfood FiberPop and SunChips Fiberwhich — along with Lay’s sponsorship of the 2026 FIFA World Cup — should provide a bigger lift for PFNA going forward.
“In additionwe will continue to reduce costs and drive operational excellencewith a focus on ensuring that key metrics such as service levelsorder fill rates and costs per unit show further improvements,” Laguarta said. “Savings will help fund commercial activities and brand communications that aim to accelerate growth. Thereforewe continue to expect PFNA’s performance to improve in fiscal 2026.”
PepsiCo upheld its previous fiscal 2026 outlookwhich forecasts core constant-currency EPS to grow 4% to 6% and organic revenue to rise 2% to 4%.
“As we look aheadthe macroeconomic environment has become more volatile and uncertain because of ongoing geopolitical conflicts,” said Steve Schmittchief financial officer. “Systematic commodity hedging programs for market traded commodities are expected to provide some near‐term protection and visibility on certain input costs. With this in mindwe are affirming fiscal 2026 financial guidance. Our assumption is that our business can mitigate the impact of certain cost pressures that may persist.”
