PepsiCo stock (NASDAQ: PEP) soared in the pre-market trading on Thursday after the company managed to beat Q3 earnings expectations on both revenue and adjusted earnings per share.
The global food and beverage giant posted net revenue of $23.94 billion, up around 2.6% from last year, just a bit above what analysts were expecting.
Adjusted EPS came in at $2.29, nudging past the consensus estimate of roughly $2.26–$2.27.
On the flip side, reported net income dipped about 11% to around $2.6 billion, mainly due to some charges and changes in product mix.
International markets, especially in Latin America and Asia, delivered solid growth, helping to balance out the slower volumes in North America.
On top of that, PepsiCo announced a CFO transition as it continues pushing cost-cutting measures and adapting its portfolio to keep up with evolving consumer trends.
Key points from PepsiCo Q3 earnings report
PepsiCo saw its revenue tick up 2.6% to $23.94 billion, just nudging past Wall Street’s expectations thanks to price hikes and strong international sales.
Adjusted EPS came in at $2.29, slightly ahead of what analysts were expecting, showing the company’s ability to stay resilient even amid broader economic pressures.
That said, reported net income took a hit, dropping about 11% to around $2.6 billion, largely due to charges and a less favorable sales mix.
Looking closer at volumes, North America showed some weakness: Frito-Lay snacks slipped roughly 2%, beverage volumes fell about 3%, and certain organic measures were down around 4%.
These losses were partly offset by gains in Latin America and Asia, underlining PepsiCo’s strength in diverse global markets.
The company also stuck to its full-year guidance, expecting low-single-digit organic revenue growth and a modest decline in core EPS.
PepsiCo also announced a big leadership change: Steve Schmitt, who used to head Walmart’s US finance team, will take over as CFO when Jamie Caulfield retires.
On the operations side, the company is continuing its cost-cutting efforts, trimming product lines, making some plant adjustments, and shifting toward healthier options with smaller pack sizes and value brands.
Activist investor Elliott Investment Management, which holds around a $4 billion stake in PepsiCo, is still pushing for faster changes both operationally and strategically.
After the earnings beat, PepsiCo’s shares saw a modest bump in premarket trading, showing that investors are feeling cautiously optimistic.
PepsiCo stock: What analysts say
Analysts had a bit of a mixed take on PepsiCo’s Q3 results. The revenue beat was solid, but worries about falling volumes still linger.
Jay Woods from Freedom Capital Markets said PepsiCo “needs to deliver more than just a decent quarter,” basically saying investors want to see some real momentum, not just a small win.
Over at JPMorgan, Andrea Faria Teixeira stayed neutral and lowered her price target, noting she doesn’t see much upside until those volume issues get sorted.
On the flip side, Zacks Equity Research had a more positive take on PepsiCo’s results. They pointed out the 0.88% EPS beat and the slight revenue beat as factors that could help the stock in the near term.
Analysts also noted that PepsiCo’s push toward healthier products, cost management efforts, and digital transformation give the company a solid foundation, even with macroeconomic challenges.
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