PEP · PepsiCo, Inc.

PepsiCo's first-quarter 2026 results showed strong performance with net revenue growth of 8.5% to $19,443 million, driven by multiple factors including a 3.4-percentage-point benefit from foreign exchange translation, 2.6% organic revenue growth, and a 2.5-percentage-point net benefit from acquisitions and divestitures. The organic revenue growth reflects effective net pricing and a slight contribution from organic volume growth. Operating profit increased significantly by 24% to $3,213 million, with operating margin expanding 210 basis points to 16.5%. This performance was supported by a core operating profit increase of 9% and core operating margin expansion of 10 basis points, driven by productivity savings, net revenue growth, and a 4-percentage-point benefit from foreign exchange translation, partially offset by certain operating cost increases. Earnings per share showed robust growth with GAAP EPS increasing 27% to $1.70 and core EPS increasing 9% to $1.61. Management commentary from Chairman and CEO Ramon Laguarta highlighted acceleration in both net revenue and organic revenue growth, with notable improvement in convenient foods organic volume. The company's commercial agenda, including restaging of large global brands, innovation activity, and affordability initiatives, is being executed well. International business showed resilience while North America continued to make progress. Looking ahead, PepsiCo affirmed its fiscal 2026 financial guidance, expecting organic revenue to increase between 2-4%, core constant currency EPS to increase between 4-6%, a core annual effective tax rate of approximately 22%, capital spending below 5% of net revenue, free cash flow conversion ratio of at least 80%, and total cash returns to shareholders of approximately $8.9 billion. The company also expects a foreign exchange translation tailwind of approximately 1 percentage point to benefit reported net revenue and core EPS growth, and acquisitions net of divestitures from 2025 are expected to contribute 1 percentage point to reported net revenue growth in 2026.