---
title: "PepsiCo cuts its 2026 profit outlook as North America takes longer to mend"
url: "https://etf.net/news/pepsico-cuts-its-2026-profit-outlook-as-north-america-takes-longer-to-mend-2026-10-08"
published_at: "2026-10-08T12:18:48.065Z"
updated_at: "2026-10-08T12:18:48.065Z"
byline: "ETF.net Research"
---

# PepsiCo cuts its 2026 profit outlook as North America takes longer to mend

PepsiCo lowered its 2026 core earnings growth forecast to 2.5% to 3.5% on Thursday, October 8, even as third-quarter results beat estimates.

By ETF.net Research. Published Oct 8, 2026.

PepsiCo, the snacks and drinks maker, beat third-quarter estimates before the U.S. market opened on Thursday and cut its forecast for 2026 core earnings growth to **2.5% to 3.5%**. The company said lifting margins in North America is taking longer than it planned.

Core earnings leave out items the company does not count in ongoing results. The previous expectation was the low end of a 5% to 7% range, so the new forecast sits 1.5 to 2.5 percentage points below that 5% figure.

The cut is wider before currency translation, the effect of turning foreign results into dollars. PepsiCo had expected growth on that basis at the low end of 4% to 6%. It now expects 1% to 2%, a range that sits 2 to 3 percentage points below the 4% figure.

The outlook assumes currency translation will add about 1.5 percentage points to earnings growth, up from about 1 percentage point before. That extra half a percentage point is the difference between the two cuts.

"In North America, we remain committed to improving growth and core operating margin. However, it is taking more time than we planned," Steve Schmitt, executive vice president and chief financial officer, said in prepared remarks.

Net revenue in the fiscal third quarter, the 12 weeks ended September 5, was $25.274 billion, up 5.6% from a year earlier and $314 million above the $24.96 billion estimate compiled by LSEG. Core earnings were $2.34 a share, up 2% from a year earlier and 5 cents above LSEG's $2.29 estimate. Organic revenue, which leaves out currency moves and acquisitions, rose 3.1%.

Core operating profit rose 3%, to $4.277 billion from $4.137 billion, a gain of $140 million. The core operating margin fell 0.35 percentage points, to 16.9%.

Tariff refunds of **$178 million** were larger than that gain. PepsiCo said the refunds added 4 percentage points to the profit comparison and helped offset the margin decline in North American drinks.

In February, PepsiCo cut the prices it suggests stores charge for Lay's, Doritos, Cheetos and other snacks by up to nearly 15%. Core operating profit in its North American snack business, which includes Frito-Lay, fell 12% this quarter, and the core operating margin fell 2.8 percentage points. PepsiCo said organic revenue declined slightly, and it tied the margin drop to affordability investments, a tougher comparison with a gain on an asset sale a year earlier, and higher advertising, partly offset by productivity savings and a small rise in volume.

North American drinks lost core margin as well, by 0.15 percentage points. PepsiCo said organic revenue declined slightly, reflecting lower volume offset by pricing, while reported revenue rose 5%, mostly from acquisitions.

Outside North America, organic revenue growth accelerated to 8%, the fastest pace since the first quarter of 2024. Both the international drinks business and the international food business grew organic volume and revenue.

PepsiCo now expects organic revenue to grow about 3% this year, inside the 2% to 4% range it had been using. It expects reported revenue to grow about 6%, the top of its previous 4% to 6% range, with more help assumed from currency and from acquisitions than before.

Schmitt said the company expects North American core margins to stay under pressure in the fourth quarter. Chairman and chief executive Ramon Laguarta said additional structural cost cuts are being identified and will be put in place in the coming months, to fund investments aimed at growing sales and to offset rising input costs.

On Wednesday the shares touched $123.47, the lowest price in the past year, and closed at $123.73.

Chart: Wednesday's close pinned the **52-week** low

At 6:06 a.m. Eastern time on Thursday the shares were down less than 1% from that close in premarket trading. By 6:31 a.m. they were little changed. At 7:51 a.m., still before the opening bell, the midpoint of the bid and the ask was $126.35, up 2.1% from Wednesday's close of $123.73.

Laguarta and Schmitt take analyst questions at 8:15 a.m. Eastern time, the first chance to ask how long the North American repair will take and what the outlook assumes about tariff refunds.

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