PepsiCo (PEP) Q2 2026 earnings summary

Executive summary

• Net revenue grew 7% in the first half of 2026, reaching $43.6B, with global volumes up 3% in foods and 2% in beverages, marking the fastest volume growth since 2022.

• EPS increased 6% on a reported basis and surged 72% year-to-date, reflecting prior-year impairment charges and operating profit growth.

• Operating profit rose 65% for the half-year, driven by productivity initiatives, lower restructuring costs, and lapping prior-year impairments.

• U.S. foods business returned to volume growth and gained share, while international business remained a key growth driver with strong performance across regions.

• Company reaffirmed 2026 guidance, focusing on top-line growth, innovation, and productivity.

Financial highlights

• Net revenue for the half-year was $43.6B, up 7% year-over-year; Q2 net revenue was $24.2B, up 6.4%.

• Operating profit for the half-year was $7.2B, up 65%; Q2 operating profit was $4.0B, up 125%.

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

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

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

Outlook and guidance

• Full-year guidance reaffirmed, with organic revenue growth expected between 2–4% and core constant currency EPS growth of 4–6%.

• Total cash returns to shareholders projected at $8.9B in 2026, including $7.9B in dividends and $1B in share repurchases.

• Tariff refund claims to contribute about 1 point of EPS growth for the year, helping offset commodity inflation.

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

• Continued focus on productivity and increased marketing investment in North America in the second half.