PepsiCo (PEP) Third-Quarter 2026 Financial Results Summary
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PepsiCo (PEP) Q3 2026: Revenue Growth Accelerates, EPS Surges — Positive Outlook
PepsiCo, Inc. (NASDAQ: PEP) reported its third-quarter results for 2026, showcasing a notable performance with net revenue increasing by $1.337 billion or 5.6% compared to the same quarter last year. This growth reflects a robust demand across its product lines, particularly in international markets.
Key Financial Metrics
- Net Revenue: $25,274 million in Q3 2026 vs. $23,937 million in Q3 2025 (+5.6% YoY)
- Organic Revenue Growth: +3.1% in Q3 2026
- Earnings Per Share (EPS): $2.23 in Q3 2026 vs. $1.90 in Q3 2025 (+17% YoY)
- Core EPS: $2.34 in Q3 2026 vs. $2.29 in Q3 2025 (+2% YoY)
- Operating Profit: $4,260 million in Q3 2026 vs. $3,569 million in Q3 2025 (+19% YoY)
- Operating Margin: 16.9% in Q3 2026 vs. 14.9% in Q3 2025 (+195 bps)
Analyst View
This quarter's results are a positive development for shareholders, driven by strong revenue growth and a significant increase in earnings per share. The 17% rise in EPS is particularly noteworthy, indicating effective cost management and operational efficiency. The company's ability to achieve organic revenue growth of 3.1% amidst a challenging economic environment demonstrates its resilience and adaptability.
The increase in operating profit by 19% and the expansion of operating margin to 16.9% reflect PepsiCo's successful strategies in pricing and cost management. The company has effectively navigated rising input costs while maintaining profitability, which is crucial for sustaining shareholder value.
Dividend and Share Buyback
PepsiCo has reaffirmed its commitment to returning value to shareholders, maintaining a cash return of $8.9 billion for fiscal 2026, which includes $7.9 billion in dividends and $1.0 billion in share repurchases. This consistent return of capital is a strong signal of the company's financial health and commitment to shareholder interests.
Guidance Update
PepsiCo has updated its fiscal 2026 financial guidance:
- Organic Revenue Growth: Approximately +3% (previously +2% to +4%)
- Net Revenue Growth: Approximately +6% (previously +4% to +6%)
- Core EPS Growth: +2.5% to +3.5% (previously low-end of +5% to +7%)
The revised guidance reflects management's confidence in the company's growth trajectory and operational strategies, particularly in international markets.
Forward Catalyst
Investors should closely monitor PepsiCo's performance in the upcoming quarters, particularly its ability to sustain organic revenue growth and manage costs effectively. The company's focus on innovation and brand building, especially in underpenetrated markets, will be critical in driving future growth. Additionally, any updates on structural cost reduction initiatives and their impact on profitability will be key areas to watch.
In conclusion, PepsiCo's third-quarter results indicate a strong operational performance, positioning the company favorably for continued growth in 2026. The combination of revenue growth, improved margins, and a solid return of capital to shareholders underscores a positive outlook for the company moving forward.
Note: All amounts in the following tables are in millions.
Condensed Consolidated Statement of Income
(in millions, except per share amounts, unaudited)
| 12 Weeks Ended 9/5/2026 | 12 Weeks Ended 9/6/2025 | 36 Weeks Ended 9/5/2026 | 36 Weeks Ended 9/6/2025 | |
|---|---|---|---|---|
| Net Revenue | $ 25,274 | $ 23,937 | $ 68,898 | $ 64,582 |
| Cost of Sales | $ 11,699 | $ 11,392 | $ 31,793 | $ 29,753 |
| Gross Profit | $ 13,575 | $ 12,545 | $ 37,105 | $ 34,829 |
| Selling, General and Administrative Expenses | $ 9,436 | $ 9,157 | $ 26,050 | $ 25,360 |
| Operating Income | $ 4,260 | $ 3,569 | $ 11,496 | $ 7,941 |
| Other Income/(Expense) | $ -114 | $ 26 | $ 3 | $ 91 |
| Interest Expense | $ 242 | $ 264 | $ 773 | $ 788 |
| Income Before Income Tax | $ 3,904 | $ 3,331 | $ 10,198 | $ 7,232 |
| Provision for Income Tax | $ 834 | $ 713 | $ 2,330 | $ 1,580 |
| Net Income | $ 3,070 | $ 2,618 | $ 8,868 | $ 5,652 |
| Net Income Attributable to PepsiCo | $ 3,030 | $ 2,600 | $ 8,340 | $ 5,700 |
| Net Income per Common Share, Diluted | $ 2.23 | $ 1.90 | $ 6.10 | $ 4.15 |
| Weighted-Average Shares Used to Compute Net Income per Share, Diluted | 1,360 | 1,370 | 1,364 | 1,367 |
Condensed Consolidated Balance Sheet
(in millions, except per share amounts)
| ASSETS | 9/5/2026 | 12/27/2025 |
|---|---|---|
| Cash and cash equivalents | $ 10,675 | $ 9,159 |
| Short-term investments | $ 488 | $ 371 |
| Accounts and notes receivable, net | $ 13,623 | $ 11,506 |
| Inventories: | ||
| - Raw materials and packaging | $ 2,792 | $ 2,581 |
| - Work-in-process | $ 175 | $ 143 |
| - Finished goods | $ 3,467 | $ 3,121 |
| Total Inventories | $ 6,434 | $ 5,845 |
| Prepaid expenses and other current assets | $ 1,339 | $ 1,068 |
| Total Current Assets | $ 32,559 | $ 27,949 |
| Property, Plant and Equipment, net | $ 29,731 | $ 29,905 |
| Amortizable Intangible Assets, net | $ 1,165 | $ 1,219 |
| Goodwill | $ 18,884 | $ 18,916 |
| Other Indefinite-Lived Intangible Assets | $ 13,977 | $ 13,847 |
| Investments in Noncontrolled Affiliates | $ 2,215 | $ 2,038 |
| Deferred Income Taxes | $ 4,328 | $ 4,541 |
| Other Assets | $ 9,117 | $ 8,984 |
| Total Assets | $ 111,976 | $ 107,399 |
| LIABILITIES AND EQUITY | ||
| Current Liabilities | ||
| - Short-term debt obligations | $ 9,223 | $ 6,861 |
| - Accounts payable and other current liabilities | $ 25,306 | $ 25,903 |
| Total Current Liabilities | $ 34,529 | $ 32,764 |
| Long-Term Debt Obligations | $ 42,658 | $ 42,321 |
| Deferred Income Taxes | $ 4,107 | $ 3,802 |
| Other Liabilities | $ 8,195 | $ 7,965 |
| Total Liabilities | $ 89,489 | $ 86,852 |
| Commitments and contingencies | ||
| PepsiCo Common Shareholders’ Equity | ||
| - Common stock, par value $0.12 3/4¢ per share |
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