# PepsiCo (PEP) Q2 2026 earnings

Results filed 2026-07-09 for the quarter ended 2026-06-13. Source page: https://earnings.opennash.com/companies/pep/2026-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/77476/000007747626000037/0000077476-26-000037-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

PepsiCo reported second-quarter 2026 net revenue up 6.4%, organic revenue up 2.4%, EPS up 137% and core EPS up 4%, and affirmed its fiscal 2026 guidance.

PepsiCo's second-quarter net revenue rose 6.4% to $24,181 million. Organic revenue grew 2.4%, helped by strong volume in international businesses and beverages. Reported EPS jumped 137% to $2.18 because last year's results included impairment charges on the Rockstar and Be & Cheery brands. Core EPS rose a more modest 4% to $2.20, and core operating margin slipped 40 basis points to 16.8%.
Management affirmed fiscal 2026 guidance: organic revenue growth of 2 to 4 percent and core constant currency EPS growth of 4 to 6 percent. The tension is profitability: North America convenient foods revenue fell on lower effective net pricing as PepsiCo invests in affordability, while operating cost increases offset productivity savings and trimmed core margins. Total cash returns are expected to be about $8.9 billion.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Net revenue | $24,181 | up 6.4% from a year ago | GAAP |
| Net income attributable to PepsiCo | $2,981 |  | GAAP |
| Diluted EPS | $2.18 | up 137% from a year ago | GAAP |
| Core EPS | $2.20 | up 4% from a year ago | non-GAAP |
| Gross margin | 54.2% |  | GAAP |
| Operating profit | $4,023 | up 125% from a year ago | GAAP |
| Operating margin | 16.6% | up 875 bps from a year ago | GAAP |
| Core operating margin | 16.8% | down 40 bps from a year ago | non-GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| PepsiCo Foods North America net revenue | $6,368 | down 2% |
| PepsiCo Beverages North America net revenue | $7,243 | up 7% |
| International Beverages Franchise net revenue | $1,523 | up 11% |
| Europe, Middle East and Africa net revenue | $4,983 | up 10% |
| Latin America Foods net revenue | $2,940 | up 15% |
| Asia Pacific Foods net revenue | $1,124 | up 12% |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Organic revenue growth | fiscal 2026 | between 2 and 4 percent |
| Core constant currency EPS growth | fiscal 2026 | between 4 and 6 percent |
| Core annual effective tax rate | fiscal 2026 | approximately 22 percent |
| Capital spending as share of net revenue | fiscal 2026 | below 5 percent |
| Free cash flow conversion ratio | fiscal 2026 | at least 80 percent |
| Total cash returns to shareholders | fiscal 2026 | approximately $8.9 billion |
| Reported net revenue growth implied | fiscal 2026 | within a range of 4 to 6 percent |
| Implied core EPS growth | fiscal 2026 | approximately 5 to 7 percent |

## Key takeaways

1. **Reported EPS surged on lapping impairments** EPS increased 137% to $2.18 versus $0.92, reflecting prior-year impairment charges related to the Rockstar and Be & Cheery brands, lower restructuring charges and favorable acquisition-related items.
2. **Core profit growth was modest, margin slipped** Core EPS increased 4% and core operating profit increased 4%, while core operating margin contracted 40 basis points to 16.8%.
3. **North America foods revenue declined on pricing** PFNA net revenue fell 2%, as convenient foods reflected lower effective net pricing even as volume market share grew on innovation and affordability initiatives.
4. **International businesses drove growth** Each international segment delivered strong net revenue growth, with Latin America Foods up 15%, International Beverages Franchise up 11%, and Asia Pacific Foods up 12%.
5. **Full-year guidance affirmed unchanged** PepsiCo continues to expect organic revenue growth between 2 and 4 percent and core constant currency EPS growth between 4 and 6 percent for fiscal 2026.

## Questions

**How did PepsiCo perform in Q2 2026?** Net revenue increased 6.4% to $24,181 million, with organic revenue up 2.4%. EPS was $2.18, up 137%, and core EPS was $2.20, up 4%.
**Why did reported EPS rise so much more than core EPS?** The prior-year quarter included impairment charges related to the Rockstar and Be & Cheery brands, along with higher restructuring charges. Core EPS excludes these items and rose 4%.
**Did PepsiCo change its 2026 guidance?** No, the company affirmed it, expecting organic revenue to increase between 2 and 4 percent and core constant currency EPS to increase between 4 and 6 percent.
**How much cash does PepsiCo plan to return to shareholders in 2026?** Total cash returns are expected to be approximately $8.9 billion, made up of dividends of $7.9 billion and share repurchases of $1.0 billion.
**What were the weak spots in the quarter?** PepsiCo Foods North America net revenue declined 2% on lower effective net pricing, and core operating margin contracted 40 basis points to 16.8%.