Updated version 2 - PepsiCo to cut costs as weak North American business drags down core profit outlook

路透社2026/10/08 11:06

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Reuters, October 8 – PepsiCo (PEP.O) lowered its annual core profit forecast on Thursday and announced further cost-cutting initiatives, warning that efforts to restore growth and profitability in its key North American business are taking longer than expected. This highlights broader challenges in the packaged food industry, where companies like General Mills (GIS.N), McCormick (MKC.N), and Conagra Brands (CAG.N) are increasing promotions and pricing initiatives to stimulate demand while managing rising input costs. PepsiCo CEO Ramon Laguarta stated, "We are developing additional structural cost reduction measures that will be implemented in the coming months to fund investments aimed at accelerating organic revenue growth and mitigating the impact of rising input cost inflation." PepsiCo has been struggling with sluggish performance in its North American business. In the third quarter ended September 5, snack volumes were flat, while beverage volumes declined by 2% compared to the previous year. Despite price reductions of up to 15% for products such as Lay's and Doritos in February, the segment remains a weak spot. Last month, PepsiCo announced it would raise prices for some U.S. products to offset rising costs and improve profitability in North America—a region where profit margins have been hit by affordability initiatives, increased marketing spending, and weak demand. Since Elliott Investment Management disclosed a stake worth about $4 billion in the company last year, PepsiCo has been under pressure to revitalize its carbonated beverage business, boost its stock price, and explore the sale of non-core food assets. Following consultations with Elliott, PepsiCo announced in December it would review its North American supply chain and implement aggressive cost-cutting measures. CFO Steve Schmitt said in prepared remarks, "In North America, we remain committed to improving growth and core operating margin, though it is taking longer than planned." PepsiCo shares rose about 1% in premarket trading. The company now expects core earnings per share growth of 1% to 2% on a currency-neutral basis for fiscal 2026, down from a previously forecast low end of 4% to 6%. Organic revenue is now expected to grow about 3%, compared to a prior forecast of 2% to 4%. According to data compiled by London Stock Exchange Group (LSEG), the company’s quarterly revenue rose 5.6% to $25.27 billion, above analysts’ expectations of $24.96 billion. Quarterly core earnings per share were $2.34, also exceeding the forecast of $2.29. (Reuters provides automated translations of its reports in several other languages for the convenience of non-English speakers. Automatic translations may contain inaccuracies or fail to convey required context. Reuters does not guarantee the accuracy of translations and provides them solely for readers’ convenience. Reuters takes no responsibility for any damages or losses resulting from use of its automated translation features.)

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