PepsiCo reported first-quarter 2026 earnings that exceeded analyst expectations, with its North American food business showing its first volume growth in over two years. The food and beverage giant posted adjusted earnings per share (EPS) of $1.61, surpassing the consensus estimate of $1.55. Revenue came in at $19.44 billion, also beating the forecast of $18.94 billion and representing an 8.5% year-over-year increase.
Net income attributable to the company rose significantly to $2.33 billion, up from $1.83 billion a year ago. On a per-share basis, this translated to $1.70 versus $1.33 in the prior year. Organic revenue, which strips out acquisitions, divestitures, and currency effects, grew by 2.6%.
A key highlight was the performance of PepsiCo's Foods North America (Frito-Lay and Quaker Oats) division, which saw a 2% volume increase. This marks the first volume growth for the segment in more than two years, a period during which repeated price hikes had pushed budget-conscious shoppers toward cheaper alternatives. The turnaround is attributed to strategic price cuts of up to 15% on major brands like Lay's, Tostitos, Doritos, and Cheetos implemented in February.
In contrast, the North American beverages unit experienced a 2.5% volume decline. This segment, which includes Pepsi, Starry, and the newly acquired Poppi, is undergoing a strategic refresh. PepsiCo announced plans to revitalize Gatorade by marketing its hydration benefits beyond athletes, launching a lower-sugar version, and removing artificial colors.
The company maintained its full-year 2026 guidance, expecting organic revenue growth of 2% to 4% and core constant currency EPS growth of 4% to 6%. However, executives flagged a "more volatile and uncertain" macroeconomic environment due to ongoing geopolitical conflicts, specifically citing the war in the Middle East. CEO Ramon Laguarta noted being "encouraged with the resilience of the International business" while North America "continued to make progress."
Following the earnings release, PepsiCo's stock (PEP) edged up approximately 0.8% in premarket trading. Over the past 12 months, the stock has gained about 9%, trailing the S&P 500's 29% return.
