PepsiCo Earnings Beat; Plans U.S. Snack Price Cuts

PepsiCo earnings topped forecasts on Feb. 3, 2026, as stronger international soda volumes and U.S. low-sugar beverages offset softness in U.S. snacks. The company announced targeted U.S. price cuts on select snacks to regain volume and reaffirmed its 2026 guidance.

Quarter Results and Drivers

PepsiCo reported fourth-quarter 2025 revenue of $29.8 billion, up 2.5% year over year on a reported basis and 3.1% organically. Adjusted earnings per share rose 7% to $1.98, both exceeding analysts’ estimates, the company said in a press release.

International beverage volumes increased 8%, led by soda gains in Europe and the Asia-Pacific region. U.S. beverage volumes rose 4%, driven by low-sugar products such as Pepsi Zero Sugar. In contrast, U.S. Frito-Lay snack volumes declined 2% as consumers showed greater sensitivity to value.

Snack Pricing and Outlook

PepsiCo said in an 8-K filing it will implement targeted price reductions on select U.S. snack brands, including Lay's, starting in the first quarter of 2026. Management emphasized these are selective adjustments rather than a broad rollback, aiming to recover lost volume while limiting margin impact.

On the earnings call, Chief Executive Ramon Laguarta said, "We're taking targeted actions to deliver more value on key snack brands in the U.S., including price reductions on Doritos and Cheetos, to drive volume recovery."

The company reaffirmed its full-year 2026 guidance for mid-single-digit organic revenue growth of about 4.0% to 6.0% and core constant-currency earnings per share growth of roughly 2.0% to 3.0%. This outlook factors in an estimated 2.0% headwind from foreign-exchange movements and the deconsolidation of Venezuela. It assumes continued international momentum, a U.S. recovery driven by value pricing and innovation, an effective tax rate near 23%, and excludes one-time charges or significant mergers and acquisitions.

Management’s approach reflects confidence that international beverage strength combined with selective U.S. price cuts can restore snack volumes without jeopardizing broader 2026 targets.