PepsiCo to cut costs as weak N.America business hurts core profit forecast

In a move to address a weaker North American business, PepsiCo has lowered its annual core profit forecast and announced further cost-cutting measures, according to wire material. CEO Ramon Laguarta acknowledged that efforts to stimulate growth and profitability in North America were taking longer than anticipated. PepsiCo's Food segment volumes remained flat in the third quarter, while beverage volumes dropped by 2% from the previous year.

PepsiCo's predicament is not unique, with competitors like General Mills, McCormick, and Conagra Brands also grappling with the challenge of higher input costs, prompting them to implement additional structural cost reduction actions. Despite these setbacks, PepsiCo remains committed to enhancing growth and core operating margins, albeit with a longer time frame for results.

The company expects its fiscal 2026 core earnings per share to grow by 1% to 2% and anticipates a 3% increase in annual organic revenue. However, PepsiCo's quarterly revenue surged by 5.6% to $25.27 billion, and its core earnings per share reached $2.34, surpassing market estimates.