Core earnings of $2.34 a share topped the $2.29 estimate and revenue rose 5.6%. Refunds added 4 points to core operating profit growth of 3%, and North America showed no organic growth in either division.
PepsiCo cleared the bar for the quarter and lowered it for the year. The two pieces came from different parts of the world.
For the 12 weeks ended Sep 5, 2026, PepsiCo reported net revenue of $25.27 billion, up 5.6% and about $314 million above the analysts' average estimate of $24.96 billion. Core earnings were $2.34 a share, up 2%, against an estimate of $2.29. Earnings under generally accepted accounting principles were $2.23 a share, up 17%.
Organic revenue, which strips out acquisitions, divestitures and currency, grew 3.1%.
The refund in the profit line
Core operating profit rose 3% to $4.28 billion. PepsiCo said tariff refunds contributed 4 percentage points to that growth. Excluding them, core operating profit would have declined by roughly 1%. The core operating margin narrowed by 35 basis points to 16.9%.
The refunds are a one-time recovery of duties already paid. They lifted a quarter in which core operating profit, excluding them, slipped.
Two businesses
The quarter split cleanly by geography. PepsiCo Foods North America and PepsiCo Beverages North America each reported flat organic revenue. In the beverage unit, lower volume subtracted 3 points from organic growth, which price and mix offset.
Outside North America the picture was different. Organic revenue rose 9% in Europe, the Middle East and Africa, 9% in Asia-Pacific foods, 6% in Latin America foods and 7% in the international beverage franchise business.
Chief Executive Ramon Laguarta said the company is not competing well in soft drinks, including its flagship Pepsi, and that it plans to put "all the urgency of the business and the focus on improving our performance in soft drinks." Investment will go behind Poppi, the prebiotic soda brand it acquired, as well as Mountain Dew and Pepsi, funded by cost cuts. Chief Financial Officer Steve Schmitt said the North American improvement "is taking more time than we planned" and that margins there would remain under pressure in the fourth quarter.
The guidance
Revenue expectations went up. Profit expectations came down by roughly 2 to 3 points at both the constant-currency and reported core lines. Cash returns to shareholders are unchanged at $8.9 billion.
Laguarta said in a statement that additional structural cost reductions "are being identified and will be implemented in the coming months."
Nik Modi, an analyst at RBC Capital Markets, said the beverage business "continues to disappoint" and has argued for a full refranchising of beverage bottling.
The stock
PepsiCo shares traded at about $126.56 in early afternoon, up 2.3%, after dipping to $124.05 in the morning. The stock is down about 12% this year. Coca-Cola rose about 2.4%.
The case on each side
One reading is that investors are looking past a reset year. Revenue beat, international growth is strong, the guidance cut lowers the bar, and the company has committed to further cost cuts and a focused push in soft drinks.
Another reading is that the profit beat leaned on a refund that will not recur, core profit excluding it declined, North America did not grow, and management says margin pressure there continues into the fourth quarter.
Fourth-quarter markers
The size of the new cost program, North American beverage volume and core margin excluding refunds in the fourth quarter will show whether the reset is the floor. Any move toward refranchising would be the largest structural change on the table.