PepsiCo cuts profit-growth outlook and plans further cost reductions

PepsiCo lowered its 2026 adjusted profit-growth forecast and announced plans for further cost cuts on October 8, as sluggish demand for snacks and beverages in North America and rising input costs weighed on its business, Reuters reported. The measures are intended to fund growth investments while cushioning higher costs.

The company now expects full-year core earnings per share, adjusted for currency fluctuations, to rise 1%–2%. Reuters described its previous expectation as growth at the low end of a 4%–6% range. The revised forecast still points to earnings growth, but at a slower pace.

What changed in PepsiCo’s annual forecast

PepsiCo also expects annual organic revenue to increase about 3%, compared with its previous forecast of 2%–4%. That figure sits within the earlier range: the revenue update therefore differs from the reduction in expected earnings growth.

The comparison with earlier guidance requires some care. In its July results release, PepsiCo retained the full 4%–6% range for core constant-currency earnings growth. Reuters’ October report describes the immediately preceding expectation as the low end of that range. The timing of that intervening qualification is not established here.

Further cost cuts remain unspecified

Chief executive Ramon Laguarta outlined the purpose and broad timing of the measures in a statement quoted by Reuters: “Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation.”

The statement identifies two intended uses for the savings: supporting investment to increase revenue growth and offsetting inflation in business inputs. It describes actions being identified for implementation in the coming months, rather than savings already achieved.

Reuters’ report does not specify a savings target, restructuring charges, job reductions, facility closures or which operations would bear the additional cuts. It also establishes no consumer price changes. Those omissions leave the practical implications for employees, individual businesses and shoppers unclear.

The pressures extend beyond PepsiCo. Reuters described packaged-goods producers as facing higher input costs alongside cautious consumer spending amid rising gasoline prices, naming General Mills, McCormick and Conagra Brands. That provides industry context without establishing that those companies are taking the same measures.

PepsiCo shares were up about 1% in premarket trading, according to Reuters. That was an early trading observation, not a closing price, and the report did not establish investors’ reasons for buying or selling.

July results showed earlier margin pressure

PepsiCo’s second-quarter release provides a historical baseline for the latest forecast change. Published on July 9, it covered the quarter ended June 13, 2026. Its figures describe an earlier reporting period, separate from the third-quarter results scheduled for October 8.

Second-quarter net revenue rose 6.4% to $24.181 billion, while organic revenue grew 2.4%. Core operating profit increased 4% to $4.067 billion, but core operating margin fell from 17.2% to 16.8%, a contraction of 40 basis points. Profit increased while the margin narrowed.

Core earnings per share were $2.20, up 4%, while core constant-currency earnings per share rose 1%. Reported earnings per share were $2.18, up 137%. PepsiCo linked the large increase in reported operating profit partly to prior-year Rockstar and Be & Cheery impairment charges and lower restructuring charges.

The July release also showed different drivers across North American businesses. Convenient-foods revenue declined primarily because of lower effective net pricing, while beverage revenue growth primarily reflected acquisitions and organic growth. Those earlier explanations should not be treated as a detailed breakdown of the October demand weakness.

What PepsiCo had scheduled next

An August 25 company notice scheduled the third-quarter financial materials, covering the quarter ended September 5, for approximately 10:00 UTC on October 8. It also scheduled an analyst question-and-answer session with Laguarta and chief financial officer Steve Schmitt for 12:15 UTC, later than this report’s check.

The notice establishes the planned session, not its contents. The October forecast changes and cost-cut announcement reported here are attributed to Reuters. The scale of the additional savings and their eventual effect on demand, revenue growth and margins remain unknown.