PepsiCo, Inc. (NASDAQ:PEP) stock is trading slightly lower in the premarket session on Tuesday after delivering a solid quarter, signaling strength across both North America and international markets.
The company reported fourth-quarter adjusted earnings per share of $2.26, beating the analyst consensus estimate of $2.24. Quarterly sales of $29.34 billion (+5.6% year over year) outpaced the Street view of $28.972 billion.
“PepsiCo’s fourth quarter results reflected a sequential acceleration in reported and organic revenue growth, with improvements in both the North America and International businesses,” said Chairman and CEO Ramon Laguarta.
To recapture price-sensitive shoppers, the company is implementing price reductions of up to 15% on staple snack brands such as Lay’s and Flamin’ Hot Cheetos, according to a report by The Wall Street Journal.
The move follows a surge of customer complaints, with shoppers warning that higher prices were pushing them away from the brands. “Consumers told us they need more value,” the report added, quoting Rachel Ferdinando, CEO of PepsiCo’s U.S. food business.
Segment Performance
PepsiCo Foods North America revenue soared 1.5%, while operating profit decreased 6%, primarily reflecting certain operating cost increases.
PepsiCo Beverages North America gained 4%.
International Beverages Franchise increased 3.5% in the quarter under review, while operating profit jumped 116%.
Europe, the Middle East, and Africa revenues gained 12%, while operating profit increased 72%.
Other Metrics
Gross profit in the quarter under review increased to $15.620 billion, compared with $14.603 billion a year ago.
Gross margin expanded to 53.2% in the quarter under review from 52.6% a year earlier.
Quarterly operating profit soared to $3.557 billion, higher than $2.250 billion a year ago.
PepsiCo exited the quarter with cash and equivalents worth $9.159 billion.
The company reaffirmed its fiscal 2026 financial guidance issued in December and announced a 4% increase in its annualized dividend per share starting with the June 2026 payment, marking its 54th consecutive annual increase.
PepsiCo said it authorized a new share repurchase program allowing the company to buy back up to $10 billion of its common stock through Feb. 28, 2030.
Outlook
Laguarta said the company expects to accelerate growth in fiscal 2026 through brand restaging, expanded product innovation in emerging and functional categories, and sharper value offerings to address consumer affordability.
He added that record productivity savings should help fund growth investments, supporting improved performance in North America while keeping the international business resilient.
PepsiCo forecast fiscal 2026 adjusted earnings of $8.55 to $8.71 per share, compared with Wall Street expectations of $8.55.
PEP Price Action: PepsiCo shares were down 0.88% at $153.84 during premarket trading on Tuesday, according to Benzinga Pro data.
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