PepsiCo Q2 revenue beats estimates, but inflation and gas prices hit North America

PepsiCo reported second‑quarter revenue of $24.18 billion, a 6.4% increase year‑over‑year, surpassing the $23.95 billion Wall Street forecast. Quarterly core earnings per share rose to $2.20 from $2.12 a year earlier, while adjusted EPS missed the $2.21 consensus by a small margin.

North American performance lagged: organic sales in the foods business fell about 2%, beverage volume dropped 4%, and overall food revenue slipped 2% despite price cuts of up to 15% on brands such as Lay’s, Doritos and Cheetos. CEO Ramon Laguarta said, “Results were tempered in the quarter as U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” adding that the downturn was “driven mainly by gas prices.” Gas prices rose above $4 per gallon amid the U.S.–Iran conflict, reducing consumer spending at convenience‑store and impulse‑purchase locations.

International divisions posted solid growth, with food volumes up 3% and beverage volumes up 2% across regions such as Europe, Asia‑Pacific and the Middle East. The company reaffirmed its FY 2026 guidance, targeting 2‑4% organic revenue growth and 4‑6% core EPS growth. Shares fell as much as 5.5% after the release.