PepsiCo, Inc.
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Item 1. Business.
When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively. Certain terms used in this Annual Report on Form 10-K are defined in the Glossary included in Item 7. of this report.
Company Overview
We were incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. We are a leading global beverage and convenient food company with a complementary portfolio of brands, including Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories.
Our Operations
We are organized into six reportable segments, as follows:
1)PepsiCo Foods North America (PFNA), which includes all of our convenient food businesses in the United States and Canada;
2)PepsiCo Beverages North America (PBNA), which includes all of our beverage businesses in the United States and Canada;
3)International Beverages Franchise (IB Franchise), which includes our international franchise beverage businesses, as well as our SodaStream business;
4)Europe, Middle East and Africa (EMEA), which includes our convenient food businesses and our beverage businesses with company-owned bottlers in Europe, the Middle East and Africa;
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5)Latin America Foods (LatAm Foods), which includes all of our convenient food businesses in Latin America; and
6)Asia Pacific Foods, which consists of our convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
PepsiCo Foods North America
Either independently or in conjunction with third parties, PFNA makes, markets, distributes and sells convenient foods, which include cereals, chips, dips, granola bars, oatmeal, pasta, rice and syrups and mixes under various brands including Cheetos, Doritos, Fritos, Lay’s, Pearl Milling Company, Quaker, Ruffles and Tostitos. PFNA’s products are sold to independent distributors and retailers. In December 2024, we acquired the Strauss Group’s 50% ownership in Sabra Dipping Company, LLC (Sabra) and Sabra became a wholly-owned subsidiary. Sabra makes, markets, distributes and sells Sabra refrigerated dips and spreads.
PepsiCo Beverages North America
Either independently or in conjunction with third parties, PBNA makes, markets and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Aquafina, Bubly, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Mountain Dew Baja Blast, Pepsi, Pepsi Wild Cherry, Pepsi Zero Sugar and Propel. PBNA operates its own bottling plants and distribution facilities and sells branded finished goods directly to independent distributors and retailers. PBNA also sells concentrate and finished goods for our brands to authorized and independent bottlers, who in turn sell our branded finished goods to independent distributors and retailers in certain markets. PBNA also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea and coffee products through joint ventures with Unilever (under the Lipton brand name) and Starbucks, respectively. Further, PBNA manufactures and distributes certain brands licensed from Keurig Dr Pepper Inc., including Crush, Dr Pepper and Schweppes, and certain juice brands licensed from Dole Food Company, Inc. and Ocean Spray Cranberries, Inc. PBNA also distributes, in certain channels, brands owned by Celsius Holdings, Inc. (Celsius), including Celsius, Alani Nu and Rockstar. In the United States, PBNA acts as the exclusive distributor for small-format and foodservice customers with chilled direct-store-delivery (DSD) for the portfolio of brands owned by Tropicana Beverages Group (TBG).
International Beverages Franchise
IB Franchise makes, markets and sells beverage concentrates to authorized and independent bottlers under various beverage brands including 7UP, Aquafina, Gatorade, Mirinda, Mountain Dew, Pepsi, Pepsi Black, Pepsi Zero Sugar, and Sting Energy. IB Franchise also manufactures and distributes SodaStream sparkling water makers and related products. Further, IB Franchise, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
Europe, Middle East and Africa
Either independently or in conjunction with third parties, EMEA makes, markets, distributes and sells a number of convenient food brands including Cheetos, Chipsy, Doritos, Lay’s, Quaker, Sasko, Spekko, Walkers and White Star through consolidated businesses, as well as through noncontrolled affiliates. EMEA also, either independently or in conjunction with third parties, makes, markets, distributes and sells a number of beverage brands including 7UP, Adrenaline Rush, Aquafina, Lubimy, Mirinda, Pepsi and Pepsi Zero Sugar. EMEA operates its own bottling plants and distribution facilities and sells finished goods directly to independent distributors and retailers. Further, EMEA makes, markets, distributes and sells a number of dairy products including Agusha, Chudo and Domik v Derevne. EMEA also, either
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independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
Latin America Foods
Either independently or in conjunction with third parties, LatAm Foods makes, markets, distributes and sells a number of convenient food brands including Cheetos, Doritos, Emperador, Lay’s, Marias Gamesa, Quaker, Ruffles, Sabritas, Saladitas Gamesa and Tostitos.
Asia Pacific Foods
Either independently or in conjunction with third parties, Asia Pacific Foods makes, markets, distributes and sells a number of convenient food brands including BaiCaoWei, Cheetos, Doritos, Kurkure, Lay’s, Quaker and Smith’s, through consolidated businesses, as well as through noncontrolled affiliates.
Our Distribution Network
Our products are primarily brought to market through DSD, customer warehouse and distributor networks and are also sold directly to consumers through e-commerce platforms and retailers. The distribution system used depends on customer needs, product characteristics and local trade practices.
Direct-Store-Delivery
We, our independent bottlers and our distributors operate DSD systems that deliver beverages and convenient foods directly to retail stores where the products are merchandised by our employees or our independent bottlers. DSD enables us to merchandise with maximum visibility and appeal. DSD is especially well-suited to products that are restocked often and respond to in-store promotion and merchandising.
Customer Warehouse
Some of our products are delivered from our manufacturing plants and distribution centers, both company and third-party operated, to customer warehouses, which is a less costly method of distribution than DSD.
Distributor Networks
We distribute many of our products through third-party distributors. Third-party distributors are particularly effective when greater distribution reach can be achieved by including a wide range of products on the delivery vehicles. For example, our foodservice and vending business distributes beverages and convenient foods to restaurants, businesses, schools and stadiums through third-party foodservice and vending distributors and operators.
E-commerce
Our products are also available and sold directly to consumers on a growing number of company-owned and third-party e-commerce websites and mobile commerce applications.
Ingredients and Other Supplies
The principal ingredients we use in our beverage and convenient food products are acesulfame potassium, aspartame, cocoa products, corn, corn sweeteners, flavorings, flour, juice concentrates, nuts, oats, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and wheat. We also use water in the manufacturing of our products. Our key packaging materials include plastic resin, including polyethylene terephthalate (PET), polyethylene and polypropylene used for plastic beverage bottles and film packaging for convenient foods, aluminum, glass, closures, cardboard and paperboard cartons. In addition, we continue to integrate recyclability into our product development process and support the increased use of recycled content, including recycled PET, in our packaging. Fuel, electricity and natural gas are also important commodities for our businesses due to their use in our and our business partners’
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facilities and the vehicles delivering our products. We employ specialists to secure adequate supplies of many of these items and have not experienced any significant continuous shortages that would prevent us from meeting our requirements. Many of these ingredients, raw materials and commodities are purchased in the open market. The prices we pay for such items are subject to fluctuation, and we manage this risk through the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. When prices increase, we may or may not pass on such increases to our customers. In addition, we continue to make investments to improve the sustainability and resources of our agricultural supply chain, including the development of our initiative to advance sustainable farming practices by our suppliers and expanding it further globally. During 2025, we continued to experience volatility in our commodity, packaging and other input costs that may continue into fiscal 2026. See Note 9 to our consolidated financial statements for further information on how we manage our exposure to commodity prices.
We also maintain voluntary supply chain finance agreements with several participating global financial institutions, pursuant to which our suppliers, at their sole discretion, may elect to sell their accounts receivable with PepsiCo to such global financial institutions. These agreements did not have a material impact on our business or financial results. See “Our Financial Results – Our Liquidity and Capital Resources” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 14 to our consolidated financial statements for further information.
Our Brands and Intellectual Property Rights
We own numerous valuable trademarks which are essential to our worldwide businesses, including Adrenaline Rush, Agusha, Amp Energy, Aquafina, Aquafina Flavorsplash, Aqua Minerale, Arto Lifewtr, Baja Blast, BaiCaoWei, Bare, Bokomo, Bubly, Cap’n Crunch, Ceres, Cheetos, Chester’s, Chipsy, Chokis, Chudo, Cracker Jack, Crunchy, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet 7UP (outside the United States), Domik v Derevne, Doritos, Duyvis, Elma Chips, Emperador, Evolve, Fast Twitch, Frito-Lay, Fritos, Fruktovy Sad, Futurelife, G2, Gamesa, Gatorade, Gatorade Fit, Gatorade Zero, Gatorlyte, Grandma’s, H2oh!, Hard MTN Dew, Health Warrior, Imunele, J7, Kas, Kurkure, Lay’s, Life, Lifewtr, Liquifruit, Lubimy, Manzanita Sol, Marias Gamesa, Matutano, Mirinda, Miss Vickie’s, Moirs, Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew Game Fuel, Mountain Dew Kickstart, Mountain Dew Zero Sugar, Mug, Munchies, Muscle Milk, Near East, Obela, Off the Eaten Path, Paso de los Toros, Pasta Roni, Pearl Milling Company, Pepsi, Pepsi Black, Pepsi Max, Pepsi Wild Cherry, Pepsi Zero Sugar, PopCorners, Poppi, Pronutro, Propel, Quaker, Quaker Chewy, Quaker Simply Granola, Rice-A-Roni, Rockstar (outside the United States and Canada), Rold Gold, Ruffles, Sabra, Sabritas, Safari, Sakata, Saladitas Gamesa, San Carlos, Sandora, Santitas, Sasko, 7UP (outside the United States), 7UP Free (outside the United States), Siete, Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, SodaStream, Sonric’s, Spekko, Stacy’s, Starry, Starry Zero Sugar, Sting Energy, Stubborn Soda, SunChips, Toddy, Toddynho, Tostitos, Vesely Molochnik, Walkers, Weetbix, White Star, Ya and Yachak. We also hold long-term licenses to use valuable trademarks in connection with our products in certain markets, including Ocean Spray. We also distribute Celsius, Alani Nu and Rockstar energy drinks in certain channels across the United States and Canada. In addition, we distribute various Keurig Dr Pepper Inc. brands in certain markets in the United States and Canada, including Dr Pepper, Crush and Schweppes. Joint ventures in which we have an ownership interest either own or have the right to use certain trademarks, such as Lipton and Starbucks. In the United States, PepsiCo acts as the exclusive distributor for TBG’s portfolio of brands for small-format and foodservice customers with chilled DSD. In 2024, we shifted our alcoholic beverage business away from distribution to a trademark licensing model and flavor sales model and have licensed certain of our brands in certain markets in the United States and internationally. Trademarks remain valid so long as they are used properly for identification purposes, and we emphasize correct use of our trademarks. We have authorized, through licensing arrangements, the use
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of many of our trademarks in such contexts as convenient food joint ventures and beverage bottling appointments. In addition, we license the use of our trademarks on merchandise that is sold at retail, which enhances brand awareness.
We either own or have licenses to use a number of patents which relate to certain of our products, their packaging, the processes for their production and the design and operation of various equipment used in our businesses. Some of these patents are licensed to others.
Seasonality
Our businesses are affected by seasonal variations. Our beverage and convenient food sales are generally highest in the third quarter due to seasonal and holiday-related patterns and generally lowest in the first quarter. However, taken as a whole, seasonality has not had a material impact on our consolidated financial results.
Our Customers
Our customers include wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, among others. We normally grant our independent bottlers exclusive contracts to sell and manufacture certain beverage products bearing our trademarks within a specific geographic area. These arrangements provide us with the right to charge our independent bottlers for concentrate, finished goods and Aquafina royalties and specify the manufacturing process required for product quality. We also grant distribution rights to our independent bottlers for certain beverage products bearing our trademarks for specified geographic areas.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FINANCIAL REVIEW
Our discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our condensed consolidated financial statements and the accompanying notes. Unless otherwise noted, tabular dollars are presented in millions, except per share amounts. All per share amounts reflect common stock per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Percentage changes are based on unrounded amounts.
Our Critical Accounting Policies and Estimates
The critical accounting policies and estimates below should be read in conjunction with those outlined in our 2025 Form 10-K.
Total Marketplace Spending
We offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. Sales incentives and discounts are primarily accounted for as a reduction of revenue. A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year end once reconciled and settled.
These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined. In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred.
For interim reporting, our policy is to allocate our forecasted full-year sales incentives for most of our programs to each of our interim reporting periods in the same year that benefits from the programs. The allocation methodology is based on our forecasted sales incentives for the full year and the proportion of each interim period’s actual gross revenue or volume, as applicable, to our forecasted annual gross revenue or volume, as applicable. Based on our review of the forecasts at each interim period, any changes in estimates and the related allocation of sales incentives are recognized beginning in the interim period that they are identified. In addition, we apply a similar allocation methodology for interim reporting purposes for certain advertising and other marketing activities.
Income Taxes
In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on our expected annual income, statutory tax rates and tax structure and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. Subsequent recognition, derecognition and measurement of a tax position taken in a previous period are separately recognized in the quarter in which they occur.
Our Business Risks
This Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Statements that constitute forward-looking statements within the meaning of the Reform Act
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are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; changes in tariffs and global trade relations; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’s products; imposition of limitations on the marketing or sale of PepsiCo’s products; changes in laws and regulations related to the use or disposal of plastics or other packaging materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo’s intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations; and other risks and uncertainties including those described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our 2025 Form 10-K and in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” of this Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Risks Associated with Commodities and Our Supply Chain
Many of the commodities used in the production and transportation of our products are purchased in the open market. The prices we pay for such items are subject to fluctuation, and we manage this risk through the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures. A number of external factors, including volatile geopolitical conditions, the inflationary cost environment, import/export restrictions and tariffs, adverse weather conditions and supply chain disruptions, have impacted and may continue to impact commodity, transportation and labor costs. Additionally, conflict in the Middle East continues to disrupt global supply chains and impact
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commodity prices. When prices increase, we may or may not pass on such increases to our customers, which may result in reduced volume, revenue, margins and operating results.
See Note 8 to our condensed consolidated financial statements in this Form 10-Q and Note 9 to our consolidated financial statements in our 2025 Form 10-K for further information on how we manage our exposure to commodity prices.
Risks Associated with Climate Change
Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation of greenhouse gas emissions and potential carbon pricing programs. These new or increased legal or regulatory requirements, along with initiatives to meet our sustainability goals, could result in significant increased costs and additional investments in facilities and equipment. However, we are unable to predict the scope, nature and timing of any new or increased environmental laws and regulations and therefore cannot predict the ultimate impact of such laws and regulations on our business or financial results. We continue to monitor existing and proposed laws and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.
Risks Associated with International Operations
In the 12 weeks ended March 21, 2026, our financial results outside of North America reflect the months of January and February. In the 12 weeks ended March 21, 2026, our operations outside of the United States generated 39% of our consolidated net revenue, with Mexico, Canada, China, Russia, the United Kingdom, Brazil and South Africa, collectively, comprising 23% of our consolidated net revenue. As a result, we are exposed to foreign exchange risks in the international markets in which our products are made, manufactured, distributed or sold. In the 12 weeks ended March 21, 2026, favorable foreign exchange contributed to net revenue performance by 3 percentage points primarily due to an appreciation of the Mexican peso, Russian ruble and euro. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results.
In addition, volatile economic, political, social and geopolitical conditions, civil unrest and wars and other military conflicts, acts of terrorism and natural disasters and other catastrophic events in certain markets in which our products are made, manufactured, distributed or sold, including in Argentina, Brazil, China, Mexico, the Middle East (including Egypt), Russia, Turkey and Ukraine, continue to result in challenging operating environments and have resulted in and could continue to result in changes in how we operate in certain of these markets. Debt and credit issues, currency controls or fluctuations, sanctions and export controls in certain of these international markets (including restrictions on the transfer of funds to and from certain markets) have also continued to impact our operations in certain of these international markets. We continue to closely monitor the economic, operating and political environment in the markets in which we operate, including risks of additional impairments or write-offs and currency fluctuation, and to identify actions to potentially mitigate any unfavorable impacts on our future results. Our operations in Russia accounted for 4% of our consolidated net revenue for the 12 weeks ended March 21, 2026. Russia accounted for 5% of our consolidated assets, including 19% of our consolidated cash and cash equivalents and 40% of our accumulated currency translation adjustment loss as of March 21, 2026.
See Note 8 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of March 21, 2026 and December 27, 2025 and Note 9 to our consolidated financial statements in our 2025 Form 10-K for a discussion of these items.
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Risks Associated with Tariffs
The imposition of tariffs (including U.S. tariffs imposed or threatened to be imposed on China, the European Union, Canada and Mexico and other countries and any tariffs imposed by such countries) have impacted and could continue to impact our supply chain resulting in increased input costs, including the cost of certain raw materials and packaging. During the twelve weeks ended March 21, 2026, the U.S. Supreme Court ruled that many of the tariffs previously imposed under the International Emergency Economic Powers Act were invalid. The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. In addition, the U.S. Administration initiated new tariffs and may impose additional tariffs. As a result, there remains significant uncertainty regarding the duration and scope of existing and future tariffs and the impact of such tariffs will continue to vary, including based on where inputs are sourced from and shipped to. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty have impacted and could continue to impact our results. We will continue to evaluate the nature and extent of the impact of these tariffs on our business, to identify actions to potentially mitigate, where possible, any unfavorable impacts on our business and to monitor the regulatory and administrative developments around the potential refund of tariffs previously paid and assess their impact on our future results.
Imposition of Taxes and Regulations on our Products
Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased taxes or regulations on the manufacture, distribution or sale of our products or their packaging, ingredients or substances contained in, or attributes of, our products or their packaging, commodities used in the production of our products or their packaging or the recyclability or recoverability of our packaging. These taxes and regulations vary in scope and form. For example, some taxes apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). Further, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging, encourage waste reduction and increased recycling rates or facilitate the waste management process or restrict the sale of products in certain packaging. In addition, certain jurisdictions in which our snack products are sold have either imposed or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our snack products as a result of ingredients (such as sugar, sodium or saturated fat) contained in our products.
We sell a wide variety of beverages and convenient foods in more than 200 countries and territories and the profile of the products we sell, the amount of revenue attributable to such products and the type of packaging used vary by jurisdiction. Because of this, we cannot predict the scope or form potential taxes, regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results. In addition, taxes, regulations and limitations may impact us and our competitors differently. We expect continued scrutiny of certain ingredients and substances present in certain of our products and packaging. We continue to monitor existing and proposed taxes and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such taxes, regulations or limitations, including advocating alternative measures with respect to the imposition, form and scope of any such taxes, regulations or limitations.
Organization for Economic Co-operation and Development (OECD) Model Global Minimum Tax
In 2026, widespread implementation of the OECD model rules for a global minimum tax rate of 15% came into effect in various countries in which we do business, including European Union member states,
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resulting in an increase in our income tax provision. We will continue to monitor for additional changes to the legislation, which could further impact our income tax provision.
Retail Landscape
Our industry continues to be affected by disruption of the retail landscape, including the continued growth in sales through e-commerce websites and mobile commerce applications, including through subscription services, the integration of physical and digital operations among retailers and the international expansion of hard discounters. We have seen and expect to continue to see a further shift to e-commerce, online-to-offline and other online purchasing by consumers. We continue to monitor changes in the retail landscape and seek to identify actions we may take to build our global e-commerce and digital capabilities, such as expanding our direct-to-consumer business, and distribute our products effectively through all existing and emerging channels of trade and potentially mitigate any unfavorable impacts on our future results.
Changing dynamics at the retail level have also impacted and may continue to impact our ability to grow in certain jurisdictions. In this changing retail landscape, retailers and buying groups are shifting traditional value propositions, removing our products or otherwise reducing shelf space allocated to our products and focusing on introducing and developing private-label brands. We have seen and expect to continue to see retailers and buying groups impact our ability to compete in these jurisdictions. We continue to monitor our relationships with retailers and buying groups and seek to identify actions we may take to maintain mutually beneficial relationships and resolve any significant disputes and potentially mitigate any unfavorable impacts on our future results.
Cautionary statements included above and in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” in our 2025 Form 10-K should be considered when evaluating our trends and future results.
Results of Operations – Consolidated Review
Consolidated Results
Volume
Physical or unit volume is one of the key metrics management uses internally to make operating and strategic decisions, including the preparation of our annual operating plan and the evaluation of our business performance. We believe volume provides additional information to facilitate the comparison of our historical operating performance and underlying trends and provides additional transparency on how we evaluate our business because it measures demand for our products at the consumer level. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Financial Results – Volume” included in our 2025 Form 10-K for further information on volume. Unit volume performance adjusts for the impacts of acquisitions and divestitures. Acquisitions and divestitures, when used in this report, reflect mergers and acquisitions activity, as well as divestitures and other structural changes. Further, unit volume performance excludes the impact of an additional week of results every five or six years (53rd reporting week), where applicable.
We report all of our international operations on a monthly calendar basis. The 12 weeks ended March 21, 2026 and March 22, 2025 include volume outside of North America for the months of January and February.
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Consolidated Net Revenue and Operating Profit
| 12 Weeks Ended | |||||||||||||||||||||||||||||||
| 3/21/2026 | 3/22/2025 | Change | |||||||||||||||||||||||||||||
| Net revenue | $ | 19,443 | $ | 17,919 | 9 | % | |||||||||||||||||||||||||
| Operating profit | $ | 3,213 | $ | 2,583 | 24 | % | |||||||||||||||||||||||||
| Operating margin | 16.5 | % | 14.4 | % | 2.1 | ||||||||||||||||||||||||||
See “Results of Operations – Segment Review” for a tabular presentation and discussion of key drivers of net revenue.
Operating profit increased 24%, primarily driven by productivity savings, net revenue growth, a favorable impact of net mark-to-market gains on commodity derivatives, a favorable net impact of acquisition and divestiture-related charges/credits and a 4-percentage-point favorable impact of foreign exchange translation, partially offset by certain operating cost increases.
Other Consolidated Results
| 12 Weeks Ended | |||||||||||||||||||||||||||||||||
| 3/21/2026 | 3/22/2025 | Change | |||||||||||||||||||||||||||||||
| Other pension and retiree medical benefits income | $ | (58) | $ | (23) | $ | (35) | |||||||||||||||||||||||||||
| Net interest expense and other | $ | 301 | $ | 264 | $ | 37 | |||||||||||||||||||||||||||
| Tax rate | 21.3 | % | 21.3 | % | |||||||||||||||||||||||||||||
| Net income attributable to PepsiCo | $ | 2,327 | $ | 1,834 | 27 | % | |||||||||||||||||||||||||||
Net income attributable to PepsiCo per common share – diluted | $ | 1.70 | $ | 1.33 | 27 | % | |||||||||||||||||||||||||||
Other pension and retiree medical benefits income increased $35 million, primarily reflecting the impact of the prior year recognition of special termination benefits due to restructuring actions as part of our 2019 Productivity Plan, changes in discount rates and higher expected return on plan assets.
Net interest expense and other increased $37 million, due to higher average debt balances, lower interest rates on average cash balances, higher losses on the market value of investments used to economically hedge a portion of our deferred compensation liability, partially offset by higher average cash balances and lower interest rates on average debt balances.
The reported tax rate was even with the prior year, primarily reflecting higher tax benefits from foreign results, offset by the impact of the OECD model global minimum tax.
Results of Operations – Segment Review
While our financial results in North America are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of January and February are reflected in our results for the 12 weeks ended March 21, 2026 and March 22, 2025.
In the discussions of net revenue and operating profit below, “effective net pricing” reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries.
See “Our Business Risks,” “Non-GAAP Measures” and “Items Affecting Comparability” for a discussion of items to consider when evaluating our results and related information regarding measures not in accordance with GAAP.
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Net Revenue and Organic Revenue Performance
Organic revenue performance is a non-GAAP financial measure. For a description of and further information regarding this measure, see “Non-GAAP Measures.”
| 12 Weeks Ended 3/21/2026 | |||||||||||||||||||||||||||||||||||
| Impact of | Impact of | ||||||||||||||||||||||||||||||||||
| Reported % Change, GAAP measure | Foreign exchange translation | Acquisitions and divestitures | Organic % Change, non-GAAP measure(a) | Organic volume change(b) | Effective net pricing | ||||||||||||||||||||||||||||||
| PFNA | 2 | % | — | (1) | 1 | % | 2 | (1) | |||||||||||||||||||||||||||
| PBNA | 9 | % | — | (7) | 2 | % | (4) | 6 | |||||||||||||||||||||||||||
| IB Franchise | 9 | % | (4) | — | 5 | % | (3) | 8 | |||||||||||||||||||||||||||
| EMEA | 18 | % | (12) | — | 7 | % | 6 | — | |||||||||||||||||||||||||||
| LatAm Foods | 16 | % | (13) | — | 3 | % | (2) | 5.5 | |||||||||||||||||||||||||||
| Asia Pacific Foods | 11 | % | (4) | — | 7 | % | 10 | (2) | |||||||||||||||||||||||||||
| Total | 9 | % | (3) | (2.5) | 3 | % | — | 2 | |||||||||||||||||||||||||||
(a)Amounts may not sum due to rounding.
(b)Excludes the impact of acquisitions and divestitures. In certain instances, the impact of organic volume change on net revenue performance differs from the unit volume change disclosed in the following segment discussions due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise beverage businesses, temporary timing differences between bottler case sales and concentrate shipments and equivalents (CSE). We report net revenue from our franchise beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
Operating Profit, Operating Profit Adjusted for Items Affecting Comparability and Operating Profit Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis
Operating profit adjusted for items affecting comparability and operating profit performance adjusted for items affecting comparability on a constant currency basis are both non-GAAP financial measures. For a description of and further information regarding these measures, see “Non-GAAP Measures” and “Items Affecting Comparability.”
| 12 Weeks Ended 3/21/2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| PFNA | PBNA | IB Franchise | EMEA | LatAm Foods | Asia Pacific Foods | Corporate unallocated expenses | Total | ||||||||||||||||||||||||||||||||||||||||
| Reported, GAAP measure | $ | 1,429 | $ | 736 | $ | 321 | $ | 278 | $ | 428 | $ | 217 | $ | (196) | $ | 3,213 | |||||||||||||||||||||||||||||||
Items Affecting Comparability (a) | |||||||||||||||||||||||||||||||||||||||||||||||
| Mark-to-market net impact | — | — | — | — | — | — | (182) | (182) | |||||||||||||||||||||||||||||||||||||||
| Restructuring and impairment charges | 75 | 17 | 7 | 23 | 3 | 1 | 6 | 132 | |||||||||||||||||||||||||||||||||||||||
| Acquisition and divestiture-related charges/credits | 1 | (114) | — | — | — | — | — | (113) | |||||||||||||||||||||||||||||||||||||||
| Core, non-GAAP measure | 1,505 | 639 | 328 | 301 | 431 | 218 | (372) | 3,050 | |||||||||||||||||||||||||||||||||||||||
| Impact of foreign exchange translation | (4) | (3) | (11) | (29) | (56) | (9) | — | (112) | |||||||||||||||||||||||||||||||||||||||
| Core Constant Currency, non-GAAP measure | $ | 1,501 | $ | 636 | $ | 317 | $ | 272 | $ | 375 | $ | 209 | $ | (372) | $ | 2,938 | |||||||||||||||||||||||||||||||
| Reported Operating Profit % Change, GAAP measure | (7) | % | 60 | % | 16 | % | 27 | % | 24 | % | 36 | % | (53) | % | 24 | % | ||||||||||||||||||||||||
| Core Operating Profit % Change, non-GAAP measure | (4) | % | 7 | % | 18 | % | 29 | % | 23 | % | 35 | % | (8) | % | 9 | % | ||||||||||||||||||||||||
| Core Constant Currency Operating Profit % Change, non-GAAP measure | (5) | % | 7 | % | 14 | % | 17 | % | 7 | % | 30 | % | (8) | % | 5 | % | ||||||||||||||||||||||||
30
| 12 Weeks Ended 3/22/2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| PFNA | PBNA | IB Franchise | EMEA | LatAm Foods | Asia Pacific Foods | Corporate unallocated expenses | Total | ||||||||||||||||||||||||||||||||||||||||
| Reported, GAAP measure | $ | 1,536 | $ | 460 | $ | 277 | $ | 220 | $ | 344 | $ | 160 | $ | (414) | $ | 2,583 | |||||||||||||||||||||||||||||||
Items Affecting Comparability (a) | |||||||||||||||||||||||||||||||||||||||||||||||
| Mark-to-market net impact | — | — | — | — | — | — | (16) | (16) | |||||||||||||||||||||||||||||||||||||||
| Restructuring and impairment charges | 24 | 125 | 2 | 13 | 7 | 1 | 25 | 197 | |||||||||||||||||||||||||||||||||||||||
| Acquisition and divestiture-related charges/credits | 15 | 10 | — | — | — | — | — | 25 | |||||||||||||||||||||||||||||||||||||||
| Core, non-GAAP measure | $ | 1,575 | $ | 595 | $ | 279 | $ | 233 | $ | 351 | $ | 161 | $ | (405) | $ | 2,789 | |||||||||||||||||||||||||||||||
(a)See “Items Affecting Comparability” for further information.
PFNA
Net revenue increased 2%, primarily driven by an increase in organic volume and a favorable impact of acquisitions, partially offset by unfavorable net pricing.
Unit volume grew 2%, driven primarily by a 2% increase in savory snacks volume.
Operating profit decreased 7%, primarily reflecting certain operating cost increases, the unfavorable net pricing, a 5-percentage-point unfavorable impact of gains associated with sales of certain assets in the prior year and higher restructuring charges. These impacts were partially offset by productivity savings and an increase in organic volume.
PBNA
Net revenue increased 9%, primarily driven by a favorable net impact of acquisitions and divestitures and effective net pricing, partially offset by an organic volume decline.
Unit volume declined 2.5%, primarily driven by a 3% decline in carbonated soft drink volume and a 2% decline in non-carbonated beverage volume.
Operating profit increased 60%, primarily driven by productivity savings, a favorable net impact of acquisition and divestiture-related charges/credits related to our poppi acquisition, lower restructuring charges and the effective net pricing. These impacts were partially offset by certain operating cost increases, the decline in organic volume, higher advertising and marketing expenses and a 5-percentage-point impact of higher commodity costs.
IB Franchise
Net revenue increased 9%, reflecting effective net pricing and a 4-percentage-point impact of favorable foreign exchange translation, partially offset by an organic volume decline.
Unit volume grew 0.5%, reflecting broad-based increases, partially offset by a decline in Mexico.
Operating profit increased 16%, primarily reflecting the effective net pricing and a 4-percentage-point impact of favorable foreign exchange translation, partially offset by certain operating cost increases.
EMEA
Net revenue increased 18%, primarily reflecting a 12-percentage-point impact of favorable foreign exchange translation, primarily driven by the strengthening of the Russian ruble, and organic volume growth.
Convenient foods unit volume grew 9%, primarily reflecting growth in South Africa and the Middle East.
Beverage unit volume grew 2%, primarily reflecting growth in the Middle East, partially offset by declines in Turkey and Russia.
31
Operating profit increased 27%, primarily reflecting the net revenue growth, productivity savings and a 12-percentage-point impact of favorable foreign exchange translation, primarily driven by the strengthening of the Russian ruble. These impacts were partially offset by certain operating cost increases and a 10-percentage-point impact of a dairy-related inventory reserve.
LatAm Foods
Net revenue increased 16%, reflecting a 13-percentage-point impact of favorable foreign exchange translation, primarily driven by the strengthening of the Mexican peso, and effective net pricing, partially offset by a decline in organic volume.
Unit volume declined 2%, primarily reflecting a decline in Mexico.
Operating profit increased 24%, primarily reflecting the effective net pricing, a 16-percentage-point impact of favorable foreign exchange translation, primarily driven by the strengthening of the Mexican peso, and productivity savings. These impacts were partially offset by certain operating cost increases and the decline in organic volume.
Asia Pacific Foods
Net revenue increased 11%, reflecting organic volume growth and a 4-percentage-point impact of favorable foreign exchange translation, partially offset by unfavorable net pricing.
Unit volume grew 9%, primarily reflecting growth in India and China.
Next expected filings
- ~2026-07-16 10-Q expected by 2026-07-25 (in 31 days)
- ~2026-10-08 10-Q expected by 2026-10-17 (in 115 days)
- ~2027-02-02 10-K expected by 2027-02-16 (in 232 days)
- ~2027-04-15 10-Q expected by 2027-04-24 (in 304 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-22 8-K Other Events; Financial Statements and Exhibits
- 2026-04-16 10-Q Quarterly Report
- 2026-04-16 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-11 8-K Other Events; Financial Statements and Exhibits
- 2026-02-03 10-K Annual Report
- 2026-02-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-15 8-K Officer/Director Change
- 2025-10-09 10-Q Quarterly Report
- 2025-10-09 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
- 2025-07-28 8-K Other Events; Financial Statements and Exhibits
- 2025-07-23 8-K Other Events; Financial Statements and Exhibits
- 2025-07-17 10-Q Quarterly Report
- 2025-07-17 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2025-07-17 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-23 8-K Other Events; Financial Statements and Exhibits