PepsiCo (PEP) Stock: Beats Estimates But Trails Coca-Cola in Year-to-Date Performance

TLDR

Table of Contents

PepsiCo beat Wall Street estimates with third-quarter revenue of $23.94 billion and adjusted earnings per share of $2.29
North American beverage revenue grew 2% while food revenue fell 3% as the snacking slowdown continues
The poppi acquisition shows strong results with retail sales up more than 50% year-over-year
Steve Schmitt, CFO of Walmart US, will replace retiring CFO Jamie Caulfield effective November 10
Activist investor Elliott Management disclosed a $4 billion stake in September, pushing for company turnaround

PepsiCo reported third-quarter results that topped Wall Street expectations. Revenue reached $23.94 billion, beating the consensus estimate of $23.85 billion.

PepsiCo, $PEP, Q3-25 Results:
📊 Adj. EPS: $2.29 🟢
💰 Revenue: $23.94B 🟢
📈 Net Income: $2.60B
🔎 Strong international momentum and cost optimization efforts helped offset North America headwinds and FX pressure. pic.twitter.com/fZv6DmUrpm
— EarningsTime (@Earnings_Time) October 9, 2025

Adjusted earnings per share came in at $2.29. Analysts had predicted $2.27.

The stock rose nearly 1% in premarket trading Thursday. However, shares remain down roughly 8% year-to-date while rival Coca-Cola is up about 6%.

The beverage division carried the quarter for North American operations. Revenue for beverages grew 2% during the three-month period.

Pepsi’s trademark brand delivered both volume and revenue growth. The company’s hydrating products like Proper also posted strong volume numbers.

The poppi acquisition continues to pay dividends. The brand saw retail sales jump more than 50% compared to last year.

PepsiCo bought poppi for $1.95 billion. The product joined PepsiCo’s distribution system in early September.

North American Food Business Faces Pressure

The food division tells a different story. Revenue fell 3% as the US snacking slowdown persists.

Sales volumes for Frito-Lay snacks and other foods dropped 2% in the quarter. The company said it is working to improve performance with urgency.

PepsiCo has been fighting perceptions about high prices. The company expanded distribution of value brands like Chester’s and Santitas.

It is also removing artificial colors from products at a faster pace. These moves aim to address changing consumer preferences and inflation concerns.

International Markets Provide Growth

International operations helped balance the North American struggles. Europe, Middle East and Africa revenue grew 5.5%.

Latin America posted 4% revenue growth. Asia also saw higher sales volumes during the quarter.

Net income fell 11% to $2.6 billion. The decline reflects ongoing challenges in core markets.

Elliott Investment Management disclosed a $4 billion stake in September. The activist investor sent a letter to the board last month calling for changes.

Elliott wants PepsiCo to streamline its portfolio. The firm suggested reinvesting in core brands like Mountain Dew and exploring new products like protein snacks.

The activist also recommended refranchising North American bottlers. Coca-Cola took similar action in 2017.

CEO Ramon Laguarta said revenue growth accelerated in the quarter. He pointed to the resilience of international business and improved North American beverage momentum.

The company maintained its fiscal 2025 guidance. PepsiCo expects low-single-digit organic revenue growth.

Core constant currency earnings per share should be roughly flat with the prior year. This outlook remains unchanged from previous guidance.

Steve Schmitt will become the new CFO effective November 10. He currently serves as CFO for Walmart US.

Jamie Caulfield will retire after more than 30 years with PepsiCo. He will stay in an advisory role until May 15.

Board member Darren Walker plans to leave effective November 19. Walker serves as President of the Ford Foundation.

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