PepsiCo (PEP) Q2 2026 earnings summary

Executive summary

• Net revenue grew 7.3% year-to-date and 6.4% in Q2 2026, driven by organic growth, foreign exchange, acquisitions, and effective net pricing, with global convenient foods volume up 3% and beverages up 2%.

• EPS surged 137% in Q2 and 72% year-to-date, reflecting prior-year impairment charges and operating profit growth.

• U.S. foods business returned to volume growth and gained share, while North America category growth moderated due to inflation and tightening consumer budgets.

• International business remains a key growth driver, with 7% organic revenue growth, margin expansion, and strong performance across regions.

• Fiscal 2026 guidance reaffirmed, with a strategic focus on innovation, productivity, and portfolio transformation.

Financial highlights

• Q2 net revenue: $24.2B (up 6.4% YoY); year-to-date: $43.6B (up 7.3% YoY).

• Q2 operating profit: $4.0B (up 125% YoY); year-to-date: $7.2B (up 65% YoY).

• Gross profit for the half-year reached $23.8B, with gross margin at 54.6%.

• Free cash flow for the half-year was $1.17B, up from negative $342M in the prior year.

• Cash and cash equivalents at period end were $10.3B.

Outlook and guidance

• Organic revenue growth expected between 2–4% and core constant currency EPS growth of 4–6% for 2026.

• Total cash returns to shareholders projected at $8.9B, including $7.9B in dividends and $1B in share repurchases.

• Capital spending to remain below 5% of net revenue; free cash flow conversion ratio at least 80%.

• Tariff refund claims expected to provide an EPS benefit, helping offset commodity inflation.

• North America anticipated to improve gradually, with more pronounced profit recovery in Q4.