Key Highlights

  • PepsiCo will release Q3 2026 results (quarter ended September 5) on October 8, with a Q&A session at 8:15 a.m. ET.
  • Q2 organic Revenue rose 2.4% and core EPS 4% to $2.20, but PepsiCo Foods North America organic revenue fell 2%; 2026 guidance was affirmed.
  • J&J Chairman and CEO Joaquin Duato joins PepsiCo's board as an independent director effective December 1, 2026.
  • PepsiCo plans about $8.9 billion in total cash returns for 2026, including $7.9 billion in dividends and $1.0 billion of share buybacks, after Q2 net revenue rose 6.4% to $24.18 billion.

PepsiCo, Inc. (NASDAQ:PEP) heads into its October 8 third-quarter report with investors focused on one central question: is the turnaround plan it agreed with activist investor Elliott Investment Management beginning to revive its North American snack business? The company will post its results, Form 10-Q and prepared remarks at about 6:00 a.m. Eastern time, followed by a live question-and-answer session with Chairman and Chief Executive Ramon Laguarta and Chief Financial Officer Steve Schmitt at 8:15 a.m., according to its August 25 announcement. The quarter ended September 5.

The key items to watch are whether PepsiCo Foods North America can return to growth after price cuts and a sharp reduction in product lines, whether international strength continues, and whether management keeps its full-year 2026 guidance of 2% to 4% organic revenue growth and 4% to 6% core constant-currency EPS growth.

The run-up to the report also brought a notable governance change. On September 17, PepsiCo said its board had elected Johnson & Johnson (NYSE:JNJ) Chairman and Chief Executive Joaquin Duato as an independent director, effective December 1, 2026. Duato will sit on the audit committee.

Where the Turnaround Plan Stands

The backdrop dates to December 8, 2025, when PepsiCo announced a plan developed after engagement with Elliott, which had built a roughly $4 billion stake. PepsiCo committed to sharper everyday value through targeted affordable price tiers by Brand and channel, a broader innovation agenda featuring simpler ingredients and more protein and fiber, and aggressive cost reduction. It said it had closed three Manufacturing plants and was cutting nearly 20% of U.S. SKUs by early 2026.

Elliott partner Marc Steinberg said at the time that the firm welcomed "the comprehensive review of PepsiCo's North America Supply chain and go-to-market systems, as well as PepsiCo's commitment to Board refreshment."

Duato's appointment fits that refreshment theme. Laguarta said Duato has "played a key role in driving strategic transformation, portfolio optimization and innovation" at J&J, and that his experience would help as PepsiCo "continues to evolve its portfolio, invest in growth opportunities." PepsiCo did not link the appointment to Elliott, and investors should not assume a direct connection.

Second-Quarter Results Set the Baseline

PepsiCo's July 9 second-quarter release offers the starting point for October. Net revenue rose 6.4% to $24.18 billion, helped by foreign exchange and 2025 acquisitions, while organic revenue grew 2.4%. Reported EPS jumped 137% to $2.18, largely because the prior-year quarter included Impairment charges on the Rockstar and Be & Cheery brands. Core EPS rose 4% to $2.20, and core constant-currency EPS grew just 1%. Core Operating Margin contracted 40 basis points to 16.8%.

"Year-to-date, PepsiCo's global organic Volume has increased at the highest rate since 2022," Laguarta said, citing international strength and portfolio changes such as portion-control packs, functional hydration and protein products, and zero-sugar drinks.

The weak spot remained North American snacks. PepsiCo Foods North America revenue fell 2% organically in the quarter, reflecting lower effective net pricing, and its core operating profit dropped 8%. The company said the Business gained volume market share, aided by innovation and affordability initiatives, which suggests price cuts are drawing shoppers but are not yet lifting revenue or profit.

A Tale of Two Portfolios

The segment picture shows why investors are watching North America so closely. PepsiCo Beverages North America grew organic revenue 1%, with reported revenue up 7% thanks to acquisitions made in 2025. Internationally, performance was much stronger: organic revenue rose 9% in both the International Beverages Franchise and Asia Pacific Foods, 6% in Europe, Middle East and Africa, and 4% in Latin America Foods.

For 2026, PepsiCo continues to expect a roughly 1-percentage-point foreign-exchange tailwind and a 1-point contribution from 2025 acquisitions, implying net revenue growth of 4% to 6% and core EPS growth of about 5% to 7%. It plans total cash returns of about $8.9 billion, including $7.9 billion in dividends and $1.0 billion of buybacks.

Competitive Pressures in Packaged Food and Drinks

PepsiCo operates in a packaged food and beverage sector that has struggled with value-conscious consumers, rising private-label competition and shifting preferences toward healthier and functional products. The company has acknowledged that years of steep price increases weakened demand. Rivals across snacks and soft drinks are also leaning on promotions and reformulation, which could limit how much volume PepsiCo can win back through lower prices.

The beverage side faces its own competition in energy drinks, sports drinks and functional sodas, areas where PepsiCo has invested through acquisitions. Balancing that spending with margin targets is part of what the October report will reveal.

Risks Heading Into the Print

The biggest risk is that lower prices in North American snacks Fail to produce enough extra volume, compressing margins without restoring growth. Core operating margin has already slipped this year, and further declines would test the credibility of the plan. Foreign exchange has helped reported results in 2026; a Reversal would weigh on reported growth.

PepsiCo's cautionary statement also lists commodity, packaging and labor cost inflation, tariffs and trade relations, potential taxes on its products, restrictions on Marketing and changes in retail customers' buying. Execution risk around plant closures, SKU cuts and a supply-chain review adds operational complexity. On the other hand, strong international volumes and productivity savings give management some room to absorb pressure.

The Numbers That Will Move the Stock on Oct. 8

  • PepsiCo Foods North America: whether organic revenue stabilizes or returns to growth, and whether volume share gains continue.
  • Guidance: whether the company reaffirms, narrows or changes its 2% to 4% organic revenue and 4% to 6% core constant-currency EPS targets for 2026.
  • Margins and productivity: progress on cost savings and whether core operating margin stabilizes.
  • International momentum: whether high-single-digit organic growth in Asia Pacific and international beverages holds.

Board Refresh Ahead of 2027

Beyond the report, Duato joins the board on December 1, and investors will look for any updates on the North America supply-chain and go-to-market review. The company's comments on 2027 priorities, likely to come into sharper focus with fourth-quarter results early next year, will show whether the Elliott-influenced reset is producing durable growth.