Snacks Prices, Productivity, Drinks “progress” – Takeaways From Pepsico 2025 Results

Cheetos connected waste successful Houston, Texas, 21 December 2025. Credit: Brett Hondow/Shutterstock.com

PepsiCo deed nan headlines successful much ways than 1 successful 2025 – from its striking $1.95bn woody to buy US prebiotic soda business Poppi to nan nationalist disapproval nan food-and-beverage elephantine attracted from activist investor Elliott Investment Management.

PepsiCo whitethorn person satisfied nan US hedge money (at slightest for now) pinch a multi-faceted strategy to amended nan capacity of its business successful North America (replete pinch cuts to merchandise ranges, lowering operating costs and a attraction connected “affordable value tiers”) but there’s nary mobility nan institution remains 1 of nan astir intimately watched among nan awesome listed user names.

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As such, yesterday’s (3 February) publication of PepsiCo’s fourth-quarter and full-year financial results – and its outlook commentary – were examined cautiously for signs of whether nan Gatorade and Walkers brands owner’s caller strategical changes person started to salary off.

The wide numbers

At first glance, PepsiCo’s fourth-quarter numbers looked stronger than those for nan twelvemonth arsenic a whole. Net revenue, operating profit and nett income each roseate during nan last quarter, compared to conscionable 1 retired of those basal metrics (net revenue) crossed 2025.

On an integrated basis, PepsiCo’s gross grew astatine its slowest yearly complaint successful 2025 since CEO Ramon Laguarta took nan helm successful precocious 2018.

However, arsenic nan PepsiCo main noted, location were signs of a pick-up successful nan company’s top-line capacity successful nan last 3 months of nan year.

“PepsiCo’s fourth-quarter results reflected a sequential acceleration successful reported and integrated gross growth, pinch improvements successful some nan North America and International businesses. Accelerated nett gross maturation and beardown productivity savings led to beardown operating separator description and double-digit EPS maturation successful nan 4th quarter,” Laguarta said.

PepsiCo reports a “core, constant-currency operating profit” metric to supply an denotation of its underlying profitability erstwhile factors for illustration speech rates and one-off items (such arsenic restructuring charges) are removed from nan numbers. The maturation successful that metric was stronger successful nan 4th fourth (up 13%) than for nan afloat twelvemonth (2% higher).

PepsiCo Foods North America saw its profits by that metric diminution successful nan 4th and nan twelvemonth arsenic a whole. It was nan only section to beryllium down successful some periods.

Overall, however, PepsiCo’s fourth-quarter net and gross topped Wall Street’s estimates.

The measurement question

Dig deeper and it’s clear that, for illustration galore awesome names successful nutrient and beverage, PepsiCo continues to find increasing volumes tough. Success successful securing value rises to offset terrible costs ostentation helped thrust gross maturation crossed nan assemblage successful 2023 and 2024 but attraction has switched to whether companies tin really now waste much stuff. Can they get volumes moving upwards?

At PepsiCo, results were mixed to opportunity nan least. The company’s 2 North America divisions (which were nan attraction of Elliott Investment Management’s criticism) saw volumes diminution again successful nan 4th fourth and crossed 2025.

Outside North America, PepsiCo’s business successful EMEA markets reported level drinks volumes and a 5% autumn successful what nan snacks and meal cereal institution calls “convenient foods”.

The units connected which PepsiCo reports successful Latin America and APAC are nutrient businesses. Both saw volumes emergence successful 2025, though portion income fell successful Latin America successful nan 4th quarter.

Snacks value cuts

Ahead of PepsiCo’s results, Barclays expert Lauren Lieberman said investor sentiment connected nan institution “largely hinged” connected nan outlook for its snacks business successful nan US. Snacks represents nan bulk of nan PepsiCo Foods North America business and nan division’s volumes declined successful each 4th of 2025. Lieberman said investor questions centred connected nan occurrence (or otherwise) of PepsiCo’s invention connected snacks successful nan US. She said much clip was needed to measure nan company’s capacity successful nan area arsenic it focuses connected 2 cardinal themes – “affordability and permissibility”.

On nan latter, PepsiCo has been moving to region artificial flavours and colours from galore of its US snacks products. It besides plans to motorboat products pinch much fibre and macromolecule this year.

On affordability, nan company’s moves connected value grabbed headlines successful nan US yesterday. According to Bloomberg, PepsiCo is to little nan value of definite snacks products by arsenic overmuch arsenic 15% pinch immoderate of nan cuts successful spot earlier this weekend’s Super Bowl.

PepsiCo stated yesterday it has “begun offering greater affordability connected definite packages” of brands including Lay’s, Tostitos, Doritos and Cheetos “to amended acquisition frequency”.

When PepsiCo discussed its results pinch Wall Street analysts yesterday, it was a communal taxable of nan questions put to nan company’s management, not slightest successful nan discourse of not conscionable really it mightiness impact income but besides margins.

“We’re playing discourtesy here,” CFO Steve Schmitt said. “We’re excited astir nan inaugural and nan benefits that will travel some successful measurement and income growth. From an wide perspective, this finance is manageable for nan business. It’s included successful our guidance.”

Laguarta emphasised PepsiCo expects higher volumes, nett gross and operating margins from its US snacks business successful 2026. He said nan institution had been testing little prices since nan 2nd 4th of past twelvemonth and added: “We deliberation that for immoderate consumers, debased and middle-income consumers, nan biggest clash they person coming successful our class for faster penetration is affordability. This will beryllium a very surgical, very focused connected peculiar brands, peculiar formats, peculiar channels, investment. And, from nan trial that we’ve done astatine standard successful aggregate markets, this has very bully ROI for us.”

Productivity payback

Part of nan strategy PepsiCo announced successful December aft nan discussions pinch Elliott Investment Management included improving nan company’s productivity, though nan institution was keen to underline it had already been doing. “We purpose to present a grounds twelvemonth of productivity savings successful 2026, benefiting successful portion from nan actions taken successful nan 2nd half of 2025,” PepsiCo said astatine nan time.

And, speaking to analysts yesterday, PepsiCo’s guidance underlined really amended productivity would thief salary for nan finance nan institution was making successful areas for illustration nan prices of its products.

“That’s going to thief money nan initiatives that we have. You saw nan productivity that we had successful nan 4th quarter. We expect a batch of that to transportation over. That’s going to money immoderate of our investments. And we’ll beryllium balanced astir really we usage that productivity to put successful nan business and thrust income growth,” Schmitt said.

PepsiCo’s “progress” successful North America drinks

The 4th fourth was different three-month play of declining volumes from PepsiCo’s North America beverage business.

The division’s reported revenue accelerated compared to nan 3rd 4th (up 4% compared to a 2% rise) and integrated gross again grew 2%. However, fourth-quarter volumes fell 4% versus a third-quarter diminution of 3%.

The institution said two-and-a-half points of that 4% driblet was owed to its case-pack h2o business, which had changed its distribution partner.

PepsiCo expects PepsiCo Beverages North America to “build business momentum” successful 2026 and “deliver its sixth consecutive twelvemonth of halfway operating separator description ”.

Laguarta added: “I deliberation we’re very happy pinch nan advancement we’re making successful nan beverage business. Our attraction this twelvemonth will beryllium connected expanding nan competitiveness of nan business.”

How does PepsiCo scheme to do that? Laguarta pointed to “execution, affordability [and] marque building” and said: “We’re focusing connected that, successful peculiar connected nan soft drinks and parts of nan functional hydration portfolio. We consciousness bully astir nan plans and we consciousness bully astir nan abstraction and we consciousness bully astir nan investments we’re going to beryllium making. The different point you should deliberation astir is we’ve been very accordant connected improving nan margins of nan business and 2026 will beryllium nary different.”

North America cardinal to 2026 targets

PepsiCo reiterated nan 2026 forecasts it gave successful December. The institution expects its wide integrated gross to summation by 2-4% and its “core changeless currency” EPS to emergence 4-6%. In 2025, those metrics were up 1.7% and flat, respectively.

On integrated revenue, PepsiCo expects to beryllium astatine nan higher extremity of that scope successful nan 2nd half of nan year, driven by what is nan ongoing dependable capacity of its business extracurricular North America and an betterment astatine home.

PepsiCo CEO Ramon Laguarta during nan World Economic Forum successful Davos, Switzerland, connected 30 January 2026. Credit: Krisztian Bocsi/Bloomberg via Getty Images

“We expect our world business to proceed to execute astatine akin levels to past twelvemonth – mid-single-digit,” Laguarta said. “We’re seeing bully capacity successful immoderate of our larger markets. Mexico improving successful Q4 and past besides having a bully commencement [in 2026]. China arsenic well, South Africa arsenic well. You should deliberation astir mid-single-digit maturation for our world business. That’s nan measurement it has been performing for nan past 19 quarters aliases so.

“The acceleration comes mostly from our North America businesses. On nan beverage side, we consciousness bully astir nan acceleration it had successful 2024 and 2025 and we deliberation that it will continue, truthful you should expect a small spot much acceleration from nan beverage business.

“But, clearly, it is our nutrient business that has been improving passim nan twelvemonth some measurement and nett revenue. And December was amended than October and we expect that evidently Q1 will beryllium amended than Q4 and truthful on.”

And, nan PepsiCo CEO noted, nan institution expects to spot nan use of not conscionable nan acquisition of Poppi but its move to acquire Siete Foods successful October 2024. “You person immoderate benignant of a mechanical acceleration successful integrated from immoderate of nan acquisitions we made earlier successful nan year. They move into integrated passim nan year,” Laguarta noted. “That will person besides immoderate mechanical impact. But those acquisitions are successful high-growth segments of nan category. That’s why we did it.”