PepsiCo, Inc. (NASDAQ:PEP) reported third-quarter adjusted earnings per share of $2.29, beating the analyst consensus estimate of $2.26. Quarterly sales of $23.937 billion (+2.6% year over year) outpaced the Street view of $23.827 billion.
“Our reported net revenue growth accelerated and reflects the resilience of our international business, improved momentum within North America Beverages and the benefits of our portfolio reshaping actions,” said Chairman and CEO Ramon Laguarta.
Net revenue from PepsiCo Foods North America (PFNA) remained flat year over year, PepsiCo Beverages North America (PBNA) grew 2%, and International Beverages Franchise (IB Franchise) remained flat.
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Latin America Foods (LatAm Foods) sales increased 2% year over year, and Europe, Middle East and Africa (EMEA) sales rose 9%. Asia Pacific sales rose 2% in the quarter under review.
Gross profit in the quarter under review decreased to $12.824 billion from $12.923 billion in the year-ago period.
Adjusted gross margin in the quarter under review contracted to 53.9% from 55.5% in the year-ago period. Adjusted operating margin in the third quarter contracted to 17.3% from 17.9% in the year-ago period.
“As we look ahead to the balance of this year and beyond, our top priorities are to accelerate growth and aggressively optimize our cost structure,” Laguarta added.
The company said it is introducing a strong pipeline of innovation to accelerate portfolio transformation. It added that it is refining its price pack architecture to deliver better value to consumers and right-sizing its cost base to fund future initiatives.
Appoints New CFO
PepsiCo appointed Steve Schmitt as Executive Vice President and Chief Financial Officer, effective November 10, 2025, succeeding Jamie Caulfield, who will retire after more than 30 years with the company.
Schmitt joins PepsiCo from Walmart Inc. (NYSE:WMT), where he served as EVP and CFO for Walmart U.S., overseeing the finance function of its massive omni-channel operations and driving cost discipline and digital transformation initiatives.
Before Walmart, Schmitt held several leadership roles at Yum! Brands, Inc. (NYSE:YUM), gaining deep expertise in the quick-service restaurant and away-from-home business segments while shaping long-term growth strategies.
Outlook
The company issued non-GAAP guidance for 2025 because it cannot reliably forecast GAAP impacts like FX translation and commodity mark-to-market.
It expects low-single-digit organic revenue growth and core constant-currency EPS roughly flat year over year.
Management projects a 20% core annual effective tax rate and about $8.6 billion in total shareholder returns, including $7.6 billion in dividends and $1.0 billion in buybacks.
FX translation is now expected to be a 0.5-point headwind to reported net revenue and core EPS growth, improved from a prior 1.5-point headwind.
Based on these assumptions, core EPS is implied to decline 0.5% in 2025 versus 2024 core EPS of $8.16.
Price Action: PEP shares were trading higher by 2.64% to $142.51 premarket at last check Thursday.
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