Chairman and chief executive Ramon Laguarta said the quarter’s performance was “tempered” by a slowdown in US food and beverage categories as consumers faced tighter budgets amid inflationary pressures.
Earlier this year, PepsiCo reduced prices by as much as 15% on mid-sized packs of Lay’s, Doritos, Cheetos and Tostitos in the US following several years of price increases.The move helped boost snack demand in the first quarter. However, momentum faded in the April–June period, with North American snack volumes remaining flat and beverage volumes declining 4%. The company also said higher petrol prices during the quarter added further strain to household finances.
Also Read: TCS’s AI biz hits $2.6 bn run rate, growing six times faster than overall revenueDespite the broader slowdown, some product categories proved more resilient. PepsiCo said portion-controlled multipacks delivered growth in both volume and net revenue.
So-called “permissible” snack options, including Simply, SunChips, Siete and Quaker Rice Cakes, also performed strongly. Zero-sugar drinks such as Pepsi Zero Sugar and Mountain Dew Zero Sugar continued to gain traction.
The weakness in North America stood in sharp contrast to the company’s international operations. Snack volumes outside the region rose 3% during the quarter, while beverage volumes increased 2%. Globally, PepsiCo recorded its fastest organic volume growth since 2022.
The company reiterated its full-year guidance and said it expects trading conditions to improve in the second half of 2026. However, chief financial officer Steve Schmitt cautioned that the recovery in North America is now likely to be more gradual than previously expected after second-quarter performance fell short of expectations.
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(Edited by : Ajay Vaishnav)
