[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) PepsiCo reported Q3 2025 GAAP net revenue growth of 2.6% and diluted EPS of $1.90, with organic revenue at 1.3% and core constant currency EPS declining by 2%, alongside strategic priorities for growth and cost optimization [Third-Quarter 2025 Reported (GAAP) Results](index=1&type=section&id=Third-Quarter%202025%20Reported%20(GAAP)%20Results) PepsiCo reported a 2.6% net revenue performance for Q3 2025, with a foreign exchange impact of 0.5%. Diluted EPS for the quarter was $1.90, representing an 11% decrease year-over-year, with a 1% positive foreign exchange impact | Metric | Third-Quarter | Year-to-Date | | :--- | :--- | :--- | | Net revenue performance | 2.6% | 0.8% | | Foreign exchange impact on net revenue | 0.5% | (1)% | | Earnings per share (EPS) | $1.90 | $4.15 | | EPS change | (11)% | (29)% | | Foreign exchange impact on EPS | 1% | (2)% | [Third-Quarter 2025 Organic/Core (non-GAAP) Results](index=1&type=section&id=Third-Quarter%202025%20Organic%2FCore%20(non-GAAP)%20Results) For Q3 2025, PepsiCo achieved 1.3% organic revenue performance. Core EPS stood at $2.29, with core constant currency EPS declining by 2% compared to the prior year | Metric | Third-Quarter | Year-to-Date | | :--- | :--- | :--- | | Organic revenue performance | 1.3% | 1.5% | | Core EPS | $2.29 | $5.88 | | Core constant currency EPS change | (2)% | (3.5)% | [CEO Commentary & Strategic Priorities](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Priorities) Chairman and CEO Ramon Laguarta highlighted accelerated reported net revenue growth, driven by international business resilience, improved momentum in North America Beverages, and portfolio reshaping. Key priorities for the future include accelerating growth and aggressively optimizing the cost structure through innovation, sharpening price pack architecture, and right-sizing the cost base - Reported net revenue growth accelerated, reflecting resilience in international business, improved momentum in North America Beverages, and benefits from portfolio reshaping actions[5](index=5&type=chunk) - Top priorities are to accelerate growth and aggressively optimize the cost structure[6](index=6&type=chunk) - Strategies include introducing a strong pipeline of innovation, continuously sharpening price pack architecture, and right-sizing the entire cost base[6](index=6&type=chunk) [Segment Performance Summary](index=2&type=section&id=Segment%20Performance%20Summary) PepsiCo's Q3 and year-to-date 2025 segment performance shows varied revenue and operating profit changes across North America, EMEA, Latin America, and Asia Pacific regions [Third-Quarter 2025 Segment Performance](index=2&type=section&id=Third-Quarter%202025%20Segment%20Performance) In Q3 2025, PepsiCo's total reported net revenue increased by 3%, with organic revenue growth of 1%. EMEA showed strong organic revenue growth at 5.5%, while PFNA experienced a 3% organic revenue decline. Operating profit saw a GAAP reported decline of 8% overall, but core constant currency operating profit declined by 1.5% Q3 2025 Revenue Performance by Segment | Segment | GAAP Reported % Change | Foreign Exchange Translation | Acquisitions and Divestitures | Organic % Change | Convenient Foods Volume % Change | Beverages Volume % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PepsiCo Foods North America (PFNA) | — | — | (2.5) | (3) | (4) | | | PepsiCo Beverages North America (PBNA) | 2 | — | — | 2 | | (3) | | International Beverages Franchise (IB Franchise) | — | (1) | — | (1) | | (1) | | Europe, Middle East and Africa (EMEA) | 9 | (4) | — | 5.5 | (1) | 1.5 | | Latin America Foods (LatAm Foods) | 2 | 2 | — | 4 | — | | | Asia Pacific Foods | 2 | — | (1) | 1 | 3 | | | **Total** | **3** | **(0.5)** | **(1)** | **1** | **(1)** | **(1)** | Q3 2025 Operating Profit and EPS by Segment | Segment | GAAP Reported % Change | Items Affecting Comparability | Foreign Exchange Translation | Core Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | PFNA | (5) | 2 | — | (3.5) | | PBNA | (20) | 13 | — | (7) | | IB Franchise | (5) | 13 | (1) | 7 | | EMEA | 1 | 6 | (4) | 3 | | LatAm Foods | (12) | 18 | 2 | 9 | | Asia Pacific Foods | 16 | 3 | (1) | 18 | | Corporate unallocated expenses | (3.5) | 19 | — | 16 | | **Total** | **(8)** | **7** | **(1)** | **(1.5)** | | **EPS** | **(11)** | **10** | **(1)** | **(2)** | [Year-to-Date 2025 Segment Performance](index=3&type=section&id=Year-to-Date%202025%20Segment%20Performance) Year-to-date 2025, PepsiCo's total reported net revenue increased by 1%, with organic revenue growth of 1.5%. LatAm Foods showed significant foreign exchange impact on revenue (10%) and strong core constant currency operating profit growth (8%). Overall GAAP reported operating profit declined by 25%, while core constant currency operating profit declined by 2% YTD 2025 Revenue Performance by Segment | Segment | GAAP Reported % Change | Foreign Exchange Translation | Acquisitions and Divestitures | Organic % Change | Convenient Foods Volume % Change | Beverages Volume % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2) | (2) | (2) | | | PBNA | 1 | — | — | 1 | | (3) | | IB Franchise | 2 | 1 | — | 3 | | 1 | | EMEA | 6 | — | — | 6 | (5) | — | | LatAm Foods | (5) | 10 | — | 4 | 1 | | | Asia Pacific Foods | — | 1 | (1) | — | 4 | | | **Total** | **1** | **1** | **(0.5)** | **1.5** | **(2)** | **—** | YTD 2025 Operating Profit and EPS by Segment | Segment | GAAP Reported % Change | Items Affecting Comparability | Foreign Exchange Translation | Core Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | PFNA | (7) | (1) | — | (8) | | PBNA | (77) | 77 | — | — | | IB Franchise | 2 | 5 | 2 | 9 | | EMEA | (13) | 20 | (1) | 5.5 | | LatAm Foods | (9) | 6 | 12 | 8 | | Asia Pacific Foods | (21) | 21 | — | — | | Corporate unallocated expenses | 9 | 5 | — | 14 | | **Total** | **(25)** | **22** | **2** | **(2)** | | **EPS** | **(29)** | **24** | **2** | **(3.5)** | [Financial Guidance and Outlook](index=4&type=section&id=Financial%20Guidance%20and%20Outlook) PepsiCo reaffirms its 2025 guidance for low-single-digit organic revenue growth and stable core constant currency EPS, with an updated foreign exchange impact and details on the investor webcast [Full-Year 2025 Guidance](index=4&type=section&id=Full-Year%202025%20Guidance) PepsiCo reaffirms its 2025 guidance, expecting low-single-digit organic revenue growth and core constant currency EPS to be approximately even with the prior year. The company anticipates a core annual effective tax rate of approximately 20% and plans total cash returns to shareholders of approximately $8.6 billion, comprising $7.6 billion in dividends and $1.0 billion in share repurchases - Company continues to expect a **low-single-digit increase** in organic revenue for 2025[18](index=18&type=chunk) - Core constant currency EPS is expected to be approximately **even with the prior year**[18](index=18&type=chunk) - Anticipates a core annual effective tax rate of approximately **20%**[18](index=18&type=chunk) - Total cash returns to shareholders of approximately **$8.6 billion**, including **$7.6 billion in dividends** and **$1.0 billion in share repurchases**[18](index=18&type=chunk) [Foreign Exchange Impact Update](index=4&type=section&id=Foreign%20Exchange%20Impact%20Update) The company has updated its expectation for foreign exchange translation headwind, now anticipating approximately 0.5 percentage points negative impact on reported net revenue and core EPS growth, an improvement from the previously expected 1.5-percentage-point headwind. This implies a 0.5% decline in core EPS for 2025, an improvement from the prior 1.5% decline - Foreign exchange translation headwind is now expected to be approximately **0.5 percentage points**, negatively impacting reported net revenue and core EPS growth (previously 1.5 percentage points)[15](index=15&type=chunk) - This updated assumption implies a **0.5% decline in core EPS in 2025** (previously 1.5% decline) compared to 2024 core EPS of $8.16[16](index=16&type=chunk) [Investor Webcast Information](index=4&type=section&id=Investor%20Webcast%20Information) PepsiCo will post prepared management remarks for its Q3 2025 results and 2025 outlook on October 9, 2025, at 6:30 a.m. (Eastern time) on its investor relations website. A live question and answer session with investors and financial analysts will follow at 8:15 a.m. (Eastern time) on the same day - Prepared management remarks for Q3 2025 results and 2025 outlook will be posted at 6:30 a.m. (Eastern time) on October 9, 2025, at https://www.pepsico.com/investors[17](index=17&type=chunk) - A live question and answer session will be hosted at 8:15 a.m. (Eastern time) on October 9, 2025, accessible via the company's investor website[17](index=17&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) PepsiCo's condensed consolidated statements of income, cash flows, and balance sheet for Q3 and year-to-date 2025 detail key financial positions and performance [Condensed Consolidated Statement of Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Income) For the 12 weeks ended September 6, 2025, PepsiCo reported net revenue of $23,937 million, a gross profit of $12,824 million, and net income attributable to PepsiCo of $2,603 million, resulting in diluted EPS of $1.90. For the 36 weeks ended September 6, 2025, net revenue was $64,582 million, gross profit $35,239 million, and diluted EPS $4.15 Condensed Consolidated Statement of Income (Selected Data) | Metric | 12 Weeks Ended 9/6/2025 (in millions) | 12 Weeks Ended 9/7/2024 (in millions) | 36 Weeks Ended 9/6/2025 (in millions) | 36 Weeks Ended 9/7/2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $23,937 | $23,319 | $64,582 | $64,070 | | Cost of sales | $11,113 | $10,396 | $29,343 | $28,563 | | Gross profit | $12,824 | $12,923 | $35,239 | $35,507 | | Operating Profit | $3,569 | $3,872 | $7,941 | $10,637 | | Net Income Attributable to PepsiCo | $2,603 | $2,930 | $5,700 | $8,055 | | Diluted Net income attributable to PepsiCo per common share | $1.90 | $2.13 | $4.15 | $5.84 | - For the 12 and 36 weeks ended September 6, 2025, charges were recognized primarily related to the impairment of the **Rockstar brand**[20](index=20&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the 36 weeks ended September 6, 2025, net cash provided by operating activities was $5,468 million, a decrease from $6,220 million in the prior year. Net cash used for investing activities significantly increased to $5,237 million, primarily due to higher acquisitions. Net cash used for financing activities decreased to $1,008 million, largely due to increased proceeds from long-term debt issuances Condensed Consolidated Statement of Cash Flows (Selected Data) | Activity | 36 Weeks Ended 9/6/2025 (in millions) | 36 Weeks Ended 9/7/2024 (in millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $5,468 | $6,220 | | Net Cash Used for Investing Activities | $(5,237) | $(2,965) | | Net Cash Used for Financing Activities | $(1,008) | $(5,282) | | Net Decrease in Cash and Cash Equivalents and Restricted Cash | $(382) | $(2,418) | | Cash and Cash Equivalents and Restricted Cash, End of Period | $8,171 | $7,343 | - Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets significantly increased to **$3,176 million in 2025** from $31 million in 2024[23](index=23&type=chunk) - Proceeds from issuances of long-term debt more than doubled to **$8,179 million in 2025** from $4,014 million in 2024[25](index=25&type=chunk) [Condensed Consolidated Balance Sheet](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of September 6, 2025, PepsiCo's total assets increased to $106,558 million from $99,467 million at December 28, 2024. This increase was driven by higher accounts and notes receivable, inventories, and goodwill. Total liabilities also increased to $87,015 million, primarily due to a rise in long-term debt obligations. Total equity grew to $19,543 million Condensed Consolidated Balance Sheet (Selected Data) | Metric | 9/6/2025 (in millions) | 12/28/2024 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $28,722 | $25,826 | | Property, Plant and Equipment, net | $29,053 | $28,008 | | Goodwill | $18,845 | $17,534 | | Total Assets | $106,558 | $99,467 | | Total Current Liabilities | $31,499 | $31,536 | | Long-Term Debt Obligations | $44,113 | $37,224 | | Total Liabilities | $87,015 | $81,296 | | Total Equity | $19,543 | $18,171 | - Accounts and notes receivable, net, increased to **$12,634 million** from $10,333 million[28](index=28&type=chunk) - Inventories increased to **$6,093 million** from $5,306 million[28](index=28&type=chunk) [Non-GAAP Measures & Glossary](index=9&type=section&id=Non-GAAP%20Measures%20%26%20Glossary) This section explains PepsiCo's use of non-GAAP financial measures for internal decision-making and provides a comprehensive glossary of related terms [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) PepsiCo uses non-GAAP financial measures like organic revenue performance, core results, and core constant currency results internally for operational and strategic decisions, including annual operating plans and compensation. These measures provide additional information for comparing historical operating results and understanding underlying performance trends, adjusting for items not indicative of ongoing performance such as mark-to-market gains/losses, restructuring charges, and acquisition/divestiture impacts - Non-GAAP measures are used internally for operating and strategic decisions, annual operating plan preparation, business performance evaluation, and compensation determination[29](index=29&type=chunk) - These measures facilitate comparison of historical operating results and trends, providing transparency on how the business is evaluated[29](index=29&type=chunk) - Adjustments are made for items like mark-to-market gains/losses, restructuring charges, acquisition/divestiture charges, asset impairment, product recall impacts, and pension/retiree medical-related amounts[30](index=30&type=chunk) [Glossary of Non-GAAP Terms](index=9&type=section&id=Glossary%20of%20Non-GAAP%20Terms) The glossary defines key non-GAAP terms used by PepsiCo, including 'Acquisitions and divestitures' for structural changes, 'Bottler case sales (BCS)' and 'Concentrate shipments and equivalents (CSE)' for beverage volume, 'Constant currency' for results assuming stable foreign exchange rates, and 'Core' results which exclude specific items affecting comparability. It also details various excluded items such as mark-to-market net impact, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges (e.g., Rockstar brand), indirect and income tax impact, product recall-related impact, and pension and retiree medical-related impact. 'Organic revenue performance' is defined as revenue adjusted for foreign exchange, acquisitions, divestitures, and calendar week impacts - Acquisitions and divestitures: Mergers, acquisitions, divestitures, and structural changes[32](index=32&type=chunk) - Constant currency: Financial results assuming constant foreign currency exchange rates based on prior-year period rates[34](index=34&type=chunk) - Core: Non-GAAP financial measures excluding items affecting comparability, such as mark-to-market net impact, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges (e.g., Rockstar brand), indirect and income tax impact, product recall-related impact, and pension and retiree medical-related impact[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Organic revenue performance: Revenue adjusted for foreign exchange translation, acquisitions and divestitures, and the impact of an additional week of results (every five or six years)[44](index=44&type=chunk) [Reconciliation of GAAP and Non-GAAP Information](index=11&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Information) This section provides detailed reconciliations of PepsiCo's GAAP reported results to non-GAAP measures for organic revenue, operating profit, and diluted EPS across various periods [Organic Revenue Performance Reconciliation (Q3 & YTD)](index=11&type=section&id=Organic%20Revenue%20Performance%20Reconciliation%20(Q3%20%26%20YTD)) The reconciliation details the adjustments from GAAP reported net revenue to non-GAAP organic revenue performance for both the 12 and 36 weeks ended September 6, 2025. For Q3 2025, total reported net revenue growth was 3%, which adjusted to 1% organic revenue growth after accounting for foreign exchange translation and acquisitions/divestitures. Year-to-date, reported net revenue growth was 1%, leading to 1.5% organic revenue growth Organic Revenue Performance Reconciliation (12 Weeks Ended 9/6/2025) | Segment | Reported Net Revenue % Change, GAAP | Impact of foreign exchange translation | Impact of acquisitions and divestitures | Organic Revenue % Change, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2.5) | (3) | | PBNA | 2 | — | — | 2 | | IB Franchise | — | (1) | — | (1) | | EMEA | 9 | (4) | — | 5.5 | | LatAm Foods | 2 | 2 | — | 4 | | Asia Pacific Foods | 2 | — | (1) | 1 | | **Total** | **3** | **(0.5)** | **(1)** | **1** | Organic Revenue Performance Reconciliation (36 Weeks Ended 9/6/2025) | Segment | Reported Net Revenue % Change, GAAP | Impact of foreign exchange translation | Impact of acquisitions and divestitures | Organic Revenue % Change, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2) | (2) | | PBNA | 1 | — | — | 1 | | IB Franchise | 2 | 1 | — | 3 | | EMEA | 6 | — | — | 6 | | LatAm Foods | (5) | 10 | — | 4 | | Asia Pacific Foods | — | 1 | (1) | — | | **Total** | **1** | **1** | **(0.5)** | **1.5** | [Certain Line Items by Segment Reconciliation (Q3 2025)](index=12&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(Q3%202025)) For the 12 weeks ended September 6, 2025, the reconciliation shows adjustments from GAAP to Core for various line items by segment. Total GAAP reported operating profit was $3,569 million (14.9% margin), which adjusted to $4,137 million (17.3% margin) on a non-GAAP Core basis, after adding back items affecting comparability such as restructuring and impairment charges ($142 million) and acquisition and divestiture-related charges ($221 million) Q3 2025 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $1,536 | $34 | $1,570 | 17.3% | | PBNA | $729 | $246 | $975 | | | IB Franchise | $436 | $75 | $511 | | | EMEA | $720 | $88 | $808 | | | LatAm Foods | $424 | $99 | $523 | | | Asia Pacific Foods | $151 | $5 | $156 | | | Corporate unallocated expenses | $(427) | $21 | $(406) | | | **Total** | **$3,569** | **$568** | **$4,137** | **17.3%** | - Items affecting comparability for Q3 2025 operating profit included **$142 million in restructuring and impairment charges**, **$221 million in acquisition and divestiture-related charges**, and **$100 million in impairment and other charges**[52](index=52&type=chunk) [Certain Line Items by Segment Reconciliation (Q3 2024)](index=13&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(Q3%202024)) For the 12 weeks ended September 7, 2024, GAAP reported operating profit was $3,872 million (16.6% margin). After adjusting for items affecting comparability, the non-GAAP Core operating profit was $4,176 million (17.9% margin). Key adjustments included $238 million for restructuring and impairment charges and $52 million for mark-to-market net impact Q3 2024 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $1,620 | $7 | $1,627 | 17.9% | | PBNA | $914 | $133 | $1,047 | | | IB Franchise | $458 | $15 | $473 | | | EMEA | $713 | $45 | $758 | | | LatAm Foods | $480 | $11 | $491 | | | Asia Pacific Foods | $129 | $2 | $131 | | | Corporate unallocated expenses | $(442) | $91 | $(351) | | | **Total** | **$3,872** | **$304** | **$4,176** | **17.9%** | - Items affecting comparability for Q3 2024 operating profit included **$238 million in restructuring and impairment charges** and **$52 million in mark-to-market net impact**[56](index=56&type=chunk) [Certain Line Items by Segment Reconciliation (YTD 2025)](index=14&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(YTD%202025)) For the 36 weeks ended September 6, 2025, GAAP reported operating profit was $7,941 million (12.3% margin). After adjustments, non-GAAP Core operating profit was $10,837 million (16.8% margin). Significant adjustments included $1,960 million for impairment and other charges, $554 million for restructuring and impairment charges, and $308 million for acquisition and divestiture-related charges YTD 2025 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $4,463 | $170 | $4,633 | 16.8% | | PBNA | $550 | $2,014 | $2,564 | | | IB Franchise | $1,248 | $73 | $1,328 | | | EMEA | $1,310 | $388 | $1,698 | | | LatAm Foods | $1,301 | $118 | $1,419 | | | Asia Pacific Foods | $321 | $89 | $410 | | | Corporate unallocated expenses | $(1,252) | $37 | $(1,215) | | | **Total** | **$7,941** | **$2,896** | **$10,837** | **16.8%** | - Items affecting comparability for YTD 2025 operating profit included **$1,960 million in impairment and other charges**, **$554 million in restructuring and impairment charges**, and **$308 million in acquisition and divestiture-related charges**[60](index=60&type=chunk) [Certain Line Items by Segment Reconciliation (YTD 2024)](index=15&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(YTD%202024)) For the 36 weeks ended September 7, 2024, GAAP reported operating profit was $10,637 million (16.6% margin). After adjustments, non-GAAP Core operating profit was $11,236 million (17.5% margin). Key adjustments included $393 million for restructuring and impairment charges and $181 million for product recall-related impact YTD 2024 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $4,802 | $228 | $5,030 | 17.5% | | PBNA | $2,411 | $150 | $2,561 | | | IB Franchise | $1,221 | $15 | $1,236 | | | EMEA | $1,509 | $85 | $1,594 | | | LatAm Foods | $1,436 | $32 | $1,468 | | | Asia Pacific Foods | $407 | $6 | $413 | | | Corporate unallocated expenses | $(1,149) | $83 | $(1,066) | | | **Total** | **$10,637** | **$599** | **$11,236** | **17.5%** | - Items affecting comparability for YTD 2024 operating profit included **$393 million in restructuring and impairment charges** and **$181 million in product recall-related impact**[64](index=64&type=chunk) [Certain Line Items Reconciliation (Q3 2025 & Q3 2024)](index=16&type=section&id=Certain%20Line%20Items%20Reconciliation%20(Q3%202025%20%26%20Q3%202024)) For Q3 2025, GAAP diluted EPS was $1.90, which adjusted to $2.29 on a non-GAAP Core basis. For Q3 2024, GAAP diluted EPS was $2.13, adjusting to $2.31 Core. The reconciliation highlights the impact of various items affecting comparability on net income and EPS, such as acquisition and divestiture-related charges and indirect and income tax impact Q3 Diluted EPS Reconciliation | Metric | 12 Weeks Ended 9/6/2025 (GAAP) | Items Affecting Comparability (9/6/2025) | 12 Weeks Ended 9/6/2025 (Core) | 12 Weeks Ended 9/7/2024 (GAAP) | Items Affecting Comparability (9/7/2024) | 12 Weeks Ended 9/7/2024 (Core) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income attributable to PepsiCo per common share - diluted | $1.90 | $0.39 | $2.29 | $2.13 | $0.18 | $2.31 | | Effective tax rate | 21.4% | -2.0% | 19.4% | 20.3% | 0.0% | 20.3% | - For Q3 2025, items affecting comparability increased diluted EPS by **$0.39**, including **$0.12 from acquisition and divestiture-related charges** and **$0.09 from indirect and income tax impact**[68](index=68&type=chunk) - For Q3 2024, items affecting comparability increased diluted EPS by **$0.18**, primarily from **$0.14 in restructuring and impairment charges**[68](index=68&type=chunk) [Certain Line Items Reconciliation (YTD 2025 & YTD 2024)](index=17&type=section&id=Certain%20Line%20Items%20Reconciliation%20(YTD%202025%20%26%20YTD%202024)) For YTD 2025, GAAP diluted EPS was $4.15, which adjusted to $5.88 on a non-GAAP Core basis. For YTD 2024, GAAP diluted EPS was $5.84, adjusting to $6.20 Core. The reconciliation highlights significant adjustments for impairment and other charges, which added $1.12 to YTD 2025 Core EPS YTD Diluted EPS Reconciliation | Metric | 36 Weeks Ended 9/6/2025 (GAAP) | Items Affecting Comparability (9/6/2025) | 36 Weeks Ended 9/6/2025 (Core) | 36 Weeks Ended 9/7/2024 (GAAP) | Items Affecting Comparability (9/7/2024) | 36 Weeks Ended 9/7/2024 (Core) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income attributable to PepsiCo per common share - diluted | $4.15 | $1.73 | $5.88 | $5.84 | $0.36 | $6.20 | | Effective tax rate | 20.8% | -0.6% | 20.2% | 20.2% | 0.1% | 20.3% | - For YTD 2025, items affecting comparability increased diluted EPS by **$1.73**, with impairment and other charges contributing **$1.12**[72](index=72&type=chunk) - For YTD 2024, items affecting comparability increased diluted EPS by **$0.36**, with restructuring and impairment charges contributing **$0.24** and product recall-related impact contributing **$0.10**[72](index=72&type=chunk) [Fiscal 2024 Diluted EPS Reconciliation](index=18&type=section&id=Fiscal%202024%20Diluted%20EPS%20Reconciliation) For the fiscal year 2024, PepsiCo's reported diluted EPS (GAAP) was $6.95. After adjusting for various items affecting comparability, the non-GAAP Core diluted EPS was $8.16. Significant adjustments included $0.41 for restructuring and impairment charges and $0.38 for impairment and other charges Fiscal 2024 Diluted EPS Reconciliation | Metric | Year Ended 12/28/2024 | | :--- | :--- | | Reported diluted EPS, GAAP measure | $6.95 | | Mark-to-market net impact | (0.01) | | Restructuring and impairment charges | 0.41 | | Acquisition and divestiture-related charges | 0.01 | | Impairment and other charges | 0.38 | | Indirect and income tax impact | 0.16 | | Product recall-related impact | 0.10 | | Pension and retiree medical-related impact | 0.16 | | **Core diluted EPS, non-GAAP measure** | **$8.16** | [Cautionary Statement](index=19&type=section&id=Cautionary%20Statement) This section outlines cautionary statements regarding PepsiCo's forward-looking statements and identifies key risks that could materially affect future results [Forward-Looking Statements and Risk Factors](index=19&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section contains cautionary statements regarding forward-looking statements, including 2025 guidance, which are based on current information and projections. These statements inherently involve risks and uncertainties that could cause actual results to differ materially. Key risks include future demand, brand image damage, competition, workforce management, water scarcity, retail landscape changes, supply chain disruptions, geopolitical conditions, economic changes, cyber incidents, and regulatory compliance. Investors are advised not to place undue reliance on these statements and to refer to SEC filings for additional risk factors - Forward-looking statements are based on currently available information, operating plans, and projections, and inherently involve risks and uncertainties[79](index=79&type=chunk) - Risks include future demand for products, damage to reputation, product recalls, competition, workforce management, water scarcity, changes in retail landscape, supply chain disruptions, political/social/geopolitical conditions, economic conditions, cyber incidents, and regulatory compliance[79](index=79&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements and should refer to PepsiCo's SEC filings (Form 10-K, 10-Q, 8-K) for additional risk factors[80](index=80&type=chunk)

Core Insights - The revival of Campa Cola by Reliance Consumer Products is disrupting the Indian soft drinks market, traditionally dominated by Coca-Cola and PepsiCo [1][2] - Campa Cola has achieved a double-digit market share across many states, breaking a 30-year duopoly in the cola market [2] - Varun Beverages, PepsiCo's second-largest bottler outside the U.S., is facing increased competition from Campa Cola, despite its plans for overseas growth [3][4] Company Developments - Reliance Consumer Products, led by Isha Ambani, has adopted aggressive pricing strategies, selling 200ml bottles of Campa Cola for 10 rupees, significantly undercutting competitors [1] - Varun Beverages is expanding internationally, having acquired PepsiCo's businesses in Tanzania and Ghana, but its stock has declined by 22% over the past year [3] - The Jubilant Bhartia Group has acquired a 40% stake in Hindustan Coca-Cola Holdings, indicating confidence in the long-term growth potential of India's food and beverage sector [4] Historical Context - Campa Cola was first introduced in 1977 and became popular after Coca-Cola exited India, but its sales declined when the market reopened [5] - Reliance is now taking Campa Cola to international markets, including the UAE and Nepal, in partnership with the Chaudhary Group [5]

Core Insights - PepsiCo is set to announce its Q3 earnings results on October 9th, before market opening [1] - Wall Street anticipates an EPS of $2.26 for the company [1] - Revenue is projected to increase by 2% to $23.84 billion [1] Financial Expectations - Expected EPS: $2.26 [1] - Expected revenue: $23.84 billion, reflecting a 2% increase [1]

Core Viewpoint - PepsiCo is set to release its third-quarter financial results, aiming to address concerns from analysts and an activist investor regarding stock performance and strategic changes [1][6]. Earnings Estimates - Analysts predict PepsiCo will report third-quarter revenue of $23.83 billion, an increase from $23.32 billion in the same quarter last year [1]. - Expected earnings per share (EPS) for the third quarter is $2.26, down from $2.31 in the previous year [2]. Recent Performance - The company has surpassed revenue estimates for three consecutive quarters and has beaten overall estimates in seven of the last ten quarters [2]. - PepsiCo stock has underperformed compared to Coca-Cola year-to-date, necessitating a strong quarterly performance to regain investor confidence [3][4]. Market Pressures - Analysts highlight several pressures on PepsiCo, including criticism of processed foods, margin pressures, and weaker innovation compared to competitors [4]. - The stock has shown flat performance over the last three years, indicating a need for improved investor sentiment [4]. Analyst Ratings and Price Targets - Bank of America Securities maintains a Neutral rating with a $150 price target, viewing PepsiCo as a defensive investment [5]. - Other analysts have adjusted their price targets downward, with JPMorgan lowering from $157 to $151 and Barclays from $144 to $140 [7]. Activist Investor Influence - Elliott Investment Management has acquired a $4 billion stake in PepsiCo and is advocating for strategic changes, including potential divestitures and cost reductions [6][7]. Market Share and Competition - PepsiCo is currently losing market share in the U.S. soda sector, ranking fourth behind Coca-Cola, Dr Pepper, and Sprite [8]. - The company has entered a distribution agreement with Celsius Holdings to enhance its presence in the non-carbonated soda market [8]. International Performance - CEO Ramon Laguarta noted strong international growth, with International Beverages up 3% year-over-year and EMEA sales up 8% year-over-year [9]. - Continued focus on international expansion and improving North American performance is a priority for the company [9]. Guidance and Stock Performance - Following second-quarter results, PepsiCo raised its full-year EPS guidance, and analysts will be monitoring for potential further increases [10]. - As of the latest trading, Pepsi stock is down 1% to $139.32, with an 8.4% decline year-to-date, trailing Coca-Cola's 7% return [10].

Core Viewpoint - PepsiCo is set to report earnings, with expectations indicating a mixed but potentially stable outlook for the company amid challenges in profitability and market performance [1][4][7]. Earnings Expectations - Earnings per share (EPS) is expected to be $2.27, a slight decline from $2.31 in the same quarter last year, indicating a modest year-over-year decrease in profitability [3]. - Revenue is anticipated to be approximately $23.88 billion, reflecting slight growth year-over-year, but suggests potential margin pressures or increased costs affecting earnings [4]. Regional Performance - North American beverage revenue is projected to be around $7.24 billion, while food revenue is expected to exceed $6.5 billion [4]. - Latin America is expected to be a bright spot, with food revenue anticipated at $2.62 billion [5]. Market Performance - PepsiCo shares have declined about 8% year-to-date and 15% over the past 12 months, underperforming the broader beverage sector, which has seen a modest gain of over 1% [5][6]. - The company's performance has prompted scrutiny regarding its strategic direction and operational efficiencies [7]. Analyst Ratings - Analysts maintain a neutral outlook, with 31% holding a buy rating, 65% a hold rating, and 4% a sell rating. JP Morgan has lowered its price target to $157 from $151, indicating some upside potential [9][10].

Core Insights - The modern production demands driven by social media platforms like TikTok are prompting organizations to reconsider their approach to third-party marketing services partnerships, moving away from an all-or-nothing strategy [1] Group 1: PepsiCo's Marketing Strategy - PepsiCo has expanded its long-term partnership with VaynerMedia by integrating the agency more closely with its internal teams to enhance agility and cultural relevance for its beverage brands [2] - The relationship between PepsiCo and VaynerMedia is characterized as "co-sourcing," which emphasizes shared business KPIs and streamlined processes to improve speed and efficiency [2][3] - PepsiCo acknowledges the challenges of navigating social media marketing, recognizing its importance for engaging consumers and driving sales [3] Group 2: Marketing Dynamics - The Chief Marketing Officer of PepsiCo Beverages U.S. highlighted the need for agility and creative flexibility in response to the fast-moving nature of social media marketing [4] - Success in modern marketing is increasingly influenced by platform algorithms, necessitating expertise in creating content that resonates with audiences [5] - VaynerMedia emphasizes that effective content will gain traction based on its merit rather than solely on media spending, suggesting a shift in how marketing effectiveness is evaluated [5][6]

Core Insights - Poppi, a US prebiotic soda brand, is set to launch in the UK early next year through an exclusive deal with an undisclosed retailer [1][2] - The brand has garnered interest from several on-trade businesses, indicating strong market demand [2] - PepsiCo acquired Poppi for $1.95 billion in March, aiming to leverage its growth potential [2][4] Company Overview - Poppi, established in 2015 and rebranded in 2020, has become a notable player in the 'better-for-you' soda market in the US [3] - The brand offers low-calorie, low-sugar sodas in 15 flavors, generating over $500 million in annual sales in 2024 [4] Market Context - The UK market is seeing a rise in 'gut-friendly' soda brands, with local brands like Hip Pop and Living Things gaining traction [5] - Carlsberg Britvic's head of new business highlighted opportunities in Mexican-style beer and functional soft drinks as potential growth areas in the UK [5][6]

Financial Earnings Overview - Next Tuesday and Wednesday are expected to be significant for the market due to a concentration of financial earnings reports from major banks [1] - Key banks reporting on Tuesday include JPMorgan Chase & Co., Wells Fargo & Company, Goldman Sachs Group Inc., and Citigroup Inc., along with Johnson & Johnson from the healthcare sector [1] - The earnings reports will continue on Wednesday with Bank of America Corporation, Morgan Stanley, ASML Holding N.V. from the semiconductor industry, and Prologis Inc. from the real estate sector [1] - Additionally, PepsiCo Inc. is scheduled to report earnings on Thursday [1]

Core Insights - PepsiCo, Inc. is facing challenges in its snack business due to the impact of GLP-1 drugs and changing preferences among younger consumers towards healthier options [1] - Elliott Management has taken a significant stake in PepsiCo, indicating a push for changes within the company, which may be revealed in the upcoming earnings report [1] - Despite recent difficulties for shareholders, PepsiCo's stock currently offers a 4% yield and maintains a strong snack franchise, particularly with its Frito-Lay brand [1] Company Overview - PepsiCo, Inc. is involved in the manufacturing, marketing, and selling of beverages and convenient foods, with well-known brands including Pepsi, Mountain Dew, Lay's, Gatorade, Doritos, Quaker, and Cheetos [2]

Core Insights - Dividend Kings are companies that have increased their dividends for at least 50 consecutive years, making them reliable long-term investments [1][13] - Many Dividend Kings currently offer above-average dividend yields, providing investors with significant passive income opportunities [2] Group 1: Consolidated Edison - Consolidated Edison has a 51-year streak of annual dividend increases, the longest among utilities in the S&P 500 [4] - The company provides electricity, natural gas, and steam to New York City, benefiting from stable demand and regulated rates, which contribute to resilient cash flows [5] - Consolidated Edison plans to invest approximately $38 billion in capital projects through 2029 to enhance system reliability and reduce carbon emissions, supporting an annual utility rate base growth of over 8% [6] Group 2: PepsiCo - PepsiCo has increased its dividend for 53 consecutive years, with a 7.5% compound annual growth rate over the past 15 years [7] - The company invests over 5% of its annual revenue into capital projects to enhance productivity and drive growth, aiming for 4%-6% organic revenue growth annually [8] - PepsiCo has made strategic acquisitions, such as the $1.7 billion purchase of Poppi in 2025, to transform its portfolio towards healthier options, which supports continued dividend increases [9] Group 3: Federal Realty Investment Trust - Federal Realty Investment Trust has a 58-year history of increasing dividends, the longest in the REIT industry [10] - The REIT focuses on high-quality retail properties in affluent suburban markets, driving strong demand for retail space [11] - Federal Realty consistently invests in property improvements and strategically sells lower-quality assets to acquire better locations, positioning itself for ongoing dividend growth [12]