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Company Research9 Apr 2025
Yum! Brands: The Company Behind Pizza Hut, KFC, and Taco Bell
Yum! Brands started at PepsiCo in the 1970s and is home to some of the most well-known brands in the world, such as Pizza Hut, KFC, and Taco Bell.
PepsiCo (PEP) investor relations material
PepsiCo Q3 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Q3 2025 earnings summary9 Oct, 2025
Executive summary
Net revenue for Q3 2025 was $23.9B, up 2.6% year-over-year, with organic revenue up 1.3%; operating profit declined 8% to $3.6B, and net income attributable to shareholders fell 11% to $2.6B.
Year-to-date net revenue was $64.6B (up 1%), but operating profit dropped 25% to $7.9B, and net income attributable to shareholders decreased 29% to $5.7B.
Focus on reigniting top-line growth through innovation, portfolio reshaping, and operational excellence, with a clear line of sight to returning to long-term growth targets in 2026.
Key profit decline drivers included higher operating costs, significant impairment charges (notably to Rockstar and Be & Cheery), and acquisition/divestiture-related charges.
Strategic relaunches of major brands and expansion in permissible snacks, zero sugar, and protein platforms supported growth.
Financial highlights
Gross margin for Q3 was 53.6%, down from 55.4% year-over-year; operating margin declined to 14.9% from 16.6%.
GAAP EPS for Q3 was $1.90, down 11% year-over-year; core EPS at $2.29, down 2% year-over-year.
Free cash flow for the 36 weeks was $3.2B, down from $3.5B in the prior year; cash and cash equivalents at period end were $8.2B.
Beverage volume grew in the quarter, with strong performance from core brands; food business saw volume impact from promotional shifts but revenue realization improved.
International business rebounded in September after weather-related softness, returning to mid-to-high single-digit growth.
Outlook and guidance
2025 guidance affirms low-single-digit organic revenue growth and core constant currency EPS approximately even with prior year.
Optimism for accelerating top-line growth in both food and beverage segments, with innovation and improved execution as key drivers.
Expectation to return to long-term net revenue growth algorithm during 2026, with margin improvement continuing.
Total expected cash returns to shareholders in 2025: $8.6B ($7.6B dividends, $1.0B share repurchases).
No material impact is expected from recent U.S. tax reform or OECD global minimum tax implementation in 2025.
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Q4 20256 Feb, 2026
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Frequently asked questions
A Beverage Industry Titan
PepsiCo Inc., globally known for its namesake beverage, Pepsi, stands as one of the largest food and beverage companies in the world. Founded in the late 19th century, the company has built an extensive portfolio that extends beyond soft drinks, reaching into the snacks and non-alcoholic beverages sectors. PepsiCo has a long-standing history and is today well established globally.
Brad’s Drink
PepsiCo's roots stretch back to the late 19th century when a North Carolina pharmacist, Caleb Bradham, created what would become Pepsi-Cola in 1893. Originally named "Brad's Drink," it was rebranded as Pepsi-Cola in 1898, inspired by the medical term for indigestion, "dyspepsia," highlighting its early marketing as a health drink. Despite the Great Depression’s adversity, which led the company to bankruptcy in 1931, Pepsi-Cola re-emerged under new management and introduced the 12-ounce bottle, a game-changing strategy in the soft drink industry.
Over the decades, PepsiCo has experienced a series of expansions and mergers, the most significant being the 1965 merger with Frito-Lay, which diversified its portfolio beyond beverages. Notably, in 1997, PepsiCo spun off its fast-food chains, including Pizza Hut, KFC, and Taco Bell, into a separate company called Yum! Brands.
Not Just Cola
PepsiCo, far beyond its well-known cola, maintains a diverse portfolio of products that spans a variety of beverage and snack categories. They've successfully carved out their place in the soft drink industry with staples like Pepsi, Mountain Dew, and 7UP. In the juice sector, PepsiCo owns Tropicana and Naked Juice, and the company's foray into the non-alcoholic beverage market includes other household names like Gatorade and Aquafina.
The Rivalry with Coca-Cola
Even if Pepsi competes against companies like Keurig Dr Pepper, nothing compares to its main rival. The rivalry between PepsiCo and Coca-Cola, often referred to as the "Cola Wars," is one of the most enduring in corporate history. Originating in the early 20th century, this competition has been characterized by creative marketing campaigns and new product introductions aimed at outperforming the other. Despite their rivalry, both brands have successfully carved out significant market share in the global beverage industry.
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