Snack and beverage giant PepsiCo, Inc. (PEP) on Thursday reported that net income for the first quarter increased from last year, reflecting improved operating margins and revenue growth across all its operating segments. The performance was boosted by resilience of the International business and continued progress in North America.
The company also affirmed its core earnings, revenue growth and organic revenue growth guidance for the full-year 2026.
"An extensive commercial agenda, which includes the restaging of large global brands, innovation activity and certain affordability initiatives, is being executed well and business performance improved," said Ramon Laguarta, Chairman and CEO.
For the first quarter, net income attributable to the company increased to $2.33 billion or $1.70 per share from $1.83 billion or $1.33 per share in the year-ago quarter.
Core earnings for the quarter were $1.61 per share, compared to $1.48 per share in the year-ago quarter. Core constant currency earnings per share were up 5 percent.
Net revenue for the quarter grew 8.5 percent to $19.44 billion from $17.92 billion in the same quarter last year. Organic revenue growth for the quarter was 2.6 percent, reflecting the benefits associated with effective net pricing and a slight contribution from organic volume growth.
In the quarter, PepsiCo Foods North America, PepsiCo Beverages North America and International Beverages Franchise reported single-digit revenue growth, while Europe, Middle East and Africa as well as Latin America Foods and Asia Pacific Foods reported double-digit revenue growth. In North America, PepsiCo Foods and PepsiCo Beverages delivered a sequential acceleration in reported net revenue and organic revenue growth.
PepsiCo Foods delivered volume growth as innovation and affordability initiatives began to take hold, while PepsiCo Beverages volume trends also improved sequentially and from the prior year.
The international businesses performed well with each segment delivering a sequential acceleration in net revenue growth.
Organic revenue growth was aided by good performance in Asia Pacific Foods; Europe, Middle East and Africa; and International Beverages Franchise while Latin America Foods remained resilient.
"As we look ahead, we aim to successfully execute our commercial plans and tightly manage costs to help fund investments to accelerate growth," added Laguarta.
Looking ahead to fiscal 2026, PepsiCo continues to project core earnings per share growth of 5 to 7 percent and core constant currency earnings per share growth of 4 to 6 percent on revenue growth of 4 to 6 percent, with organic revenue growth of 2 to 4 percent.
The Company also continues to expect a foreign exchange translation tailwind of approximately 1 percentage point to benefit reported net revenue and core EPS growth, based on current foreign exchange rates.
In addition, acquisitions, net of divestitures, that occurred in 2025 are expected to contribute 1 percentage point to reported net revenue growth in 2026.
The company said it still expects cash returns to shareholders - including the previously announced 4 percent increase in the annualized dividend per share beginning with the June 2026 payment. In Thursday's pre-market trading, PEP is trading on the Nasdaq at $156.40, up $1.55 or 1.00 percent.
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