PepsiCo Q2 revenue rises 6.4% as international markets fuel growth

PepsiCo reported a stronger than expected second quarter, with growth led by its international operations and beverages business, as the food and drinks giant reaffirmed its fiscal 2026 outlook despite continued cost pressures and a softer pricing environment in parts of North America.

For the quarter ended June 13, 2026, net revenue rose 6.4% year on year to $24.18 billion from $22.73 billion a year ago. Organic revenue grew 2.4%, supported by effective pricing and higher organic volumes, while earnings per share more than doubled to $2.18 from $0.92. Core earnings per share increased 4% to $2.20.

Chairman and CEO Ramon Laguarta said the company delivered strong organic volume and revenue growth across its global convenient foods and beverages businesses. He noted that PepsiCo's year to date organic volume growth is running at its highest level since 2022, helped by a strong international business and an evolving product portfolio focused on portion control, hydration, protein, fibre, energy products and zero sugar beverages.

Laguarta added the company will continue investing behind its brands through product innovation, affordability initiatives and productivity measures to accelerate top line growth and improve operating leverage.

"Looking ahead, we will continue to execute on our strategic priorities with a focus on accelerating top line growth – including the restaging of certain global brands, innovating with emerging, functional and permissible offerings and investing in certain affordability initiatives. We are also elevating productivity across the organization to improve operating leverage," he said.

International business drives growth

The company's international businesses remained the standout performers during the quarter. Every international segment posted strong revenue growth, aided by higher organic volumes across Asia Pacific Foods, the International Beverages Franchise, and Europe, Middle East and Africa. Latin America Foods also saw a sequential improvement in organic volume trends.

North America presented a mixed picture. PepsiCo said its convenient foods business gained volume market share through innovation and affordability initiatives, although net revenue declined because of lower effective pricing. The beverages business, meanwhile, recorded strong revenue growth, largely driven by acquisitions completed in 2025 alongside organic growth.

Among business segments, the International Beverages Franchise reported 11% revenue growth, Europe, Middle East and Africa grew 10%, Latin America Foods expanded 15%, and Asia Pacific Foods increased 12%. PepsiCo Beverages North America posted 7% revenue growth, while PepsiCo Foods North America declined 2%. Overall, convenient foods volumes increased 3% and beverage volumes rose 2% during the quarter.

Operating profit climbed 125% to $4.02 billion, while operating margin expanded to 16.6% from 7.9% a year ago. The sharp jump was largely due to the absence of last year's impairment charges related to the Rockstar and Be & Cheery brands, lower restructuring costs and favourable acquisition related adjustments. On a comparable basis, core operating profit rose 4%, although the core operating margin slipped 40 basis points to 16.8% as higher operating costs partly offset productivity gains and pricing actions.

For the first half of 2026, PepsiCo reported net revenue of $43.62 billion, up 7.3%, while net income attributable to the company rose to $5.31 billion from $3.10 billion a year earlier.

The company maintained its full year guidance, expecting organic revenue growth of 2% to 4% and core constant currency earnings per share growth of 4% to 6%. PepsiCo also expects to return about $8.9 billion to shareholders this year, including $7.9 billion through dividends and $1 billion via share repurchases.