PepsiCo reported third-quarter net income of $3.05 billion, or $2.23 per share, compared with $2.6 billion, or $1.90 per share, in the prior year. Excluding certain items, the company earned $2.34 per share. Net sales increased 5.6% to $25.27 billion, while organic revenue growth reached 3.1% during the quarter. The results topped analyst expectations.
However, the company adjusted its full-year guidance downward as challenges in its North American market persist. PepsiCo now expects core earnings per share to grow 2.5% to 3.5%, down from a previous projection of 5% to 7% growth. Net revenue growth is projected at approximately 6%, representing the high end of the company’s prior guidance range of 4% to 6%.
International operations remained the company’s strongest segment, representing 41% of net revenue through the current period. The international business showed volume growth in all but one division during the quarter, with its convenient foods unit in Europe, the Middle East and Africa experiencing a 1% volume decline. Beverage volume expanded 3% globally, while food volume increased 1%.
North American performance continued to lag expectations. The North American beverage unit posted a 2% volume decline, while its food division reported flat volume. The company has attributed slower-than-anticipated progress on its domestic turnaround strategy to the focus on product innovation and advertising investment. Recent results showed sequential improvement in the North American convenient foods business and pickup in organic volume trends for beverages driven by functional hydration and zero-sugar offerings, though its carbonated soft drink portfolio underperformed the broader category. The company plans cost reductions focused on eliminating redundancies and discretionary spending to fund continued innovation and marketing investments.
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