PepsiCo’s first quarter results were met with a positive market reaction, reflecting strong execution across core business areas. Management credited a combination of effective supply chain management, the benefits of prior productivity initiatives, and the accelerated rollout of new product innovations as key drivers of improved margins and revenue growth. CEO Ramon Laguarta highlighted the company’s ability to capture new consumption occasions and bring lapsed consumers back into the portfolio through value-driven multipacks and functional products. CFO Steve Schmitt emphasized that cost discipline and productivity allowed PepsiCo to invest flexibly in growth, particularly in North America Foods, while maintaining margin expansion.
Is now the time to buy PEP? Find out in our full research report (it’s free for active Edge members).
PepsiCo (PEP) Q1 CY2026 Highlights:
- Revenue: $19.44 billion vs analyst estimates of $18.9 billion (8.5% year-on-year growth, 2.9% beat)
- Adjusted EPS: $1.61 vs analyst estimates of $1.55 (3.8% beat)
- Adjusted EBITDA: $3.79 billion vs analyst estimates of $3.69 billion (19.5% margin, 2.9% beat)
- Operating Margin: 16.5%, up from 14.4% in the same quarter last year
- Organic Revenue rose 2.6% year on year (beat)
- Sales Volumes were flat year on year (-2% in the same quarter last year)
- Market Capitalization: $210.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PepsiCo’s Q1 Earnings Call
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Dara Mohsenian (Morgan Stanley) asked about the impact of the Iran conflict on costs and supply chain visibility. CFO Steve Schmitt explained that PepsiCo’s hedging and supply chain scale provide short-term stability but said the company is preparing for various inflation scenarios.
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Andrea Teixeira (JPMorgan) inquired about the sustainability of North America Foods’ volume growth and whether shipping ahead of shelf resets skewed results. CEO Ramon Laguarta responded that gains are broad-based, from innovation, away-from-home expansion, and improved value across multipacks.
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Bonnie Herzog (Goldman Sachs) requested clarity on margin expansion and volume pressures in beverages. Schmitt reaffirmed margin guidance flexibility, and Laguarta noted that beverage volume declines are moderating, with recent portfolio additions contributing to 9% top-line growth.
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Lauren Lieberman (Barclays) questioned the progress of the Lays brand turnaround amid tough competition. Laguarta said Lays achieved volume growth and that household penetration and repeat purchases are trending positively, with further gains expected as innovation and restaging continue.
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Peter Grom (UBS) sought details on the expected pace of sequential improvement in North America Foods. Laguarta confirmed the company anticipates accelerating organic and reported revenue and profit growth through the remainder of the year.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be closely monitoring (1) the pace and effectiveness of PepsiCo’s World Cup marketing campaigns and related consumption gains, (2) the continued impact of productivity initiatives and AI-driven supply chain changes on margins, and (3) the performance of new product launches, especially in functional hydration and permissible snacks. Further progress in international markets and the resilience of consumer demand in North America will also be key areas to watch.
PepsiCo currently trades at $153.84, in line with $154.85 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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