PepsiCo Inc

Overall performance & guidance (reaffirmed): - PepsiCo reported ~7% first-half revenue growth and global volume growth of ~3% in foods and ~2% in beverages (fastest since 2022). - EPS grew ~6% in reported terms in the first half (~3% constant currency). - Management reaffirmed full-year guidance, but indicated results may land toward the low end of the EPS range; Steve Schmitt cited: softer-than-expected North America in Q2, commodity pressure, and offsetting factors including tariff refund claims.

Second-half outlook: international resilience; North America gradually improving: - International remains the anchor: ~7% international growth accelerating, supported by resilient markets even where gas prices were elevated (Vietnam/Thailand/China; Middle East). - Expected second-half direction: North America gradually improves (slower/more moderate pace than previously expected entering Q2). - International signs are strong enough to expect continued strong growth into summer; some commodity inflation expected in EMEA mitigated by proactive actions.

Key negative/friction points in North America (what’s “not working” yet): - PFNA (U.S. salty snacks/foods) volume was flat in the quarter vs expectations. Causes cited: - Macro consumer pressure (especially gas prices) reducing conversion—especially impulse channels. - Execution delays in price investment rollouts with some customers (commercial reasons). - PBNA (U.S. beverages) margin pressure: operating margin down ~90 bps in the quarter, driven by gross profit rate decline from: - Alani/commercial arrangement impacts (~half), - softness in convenience & gas channels, and - product mix. - Away-from-home slowed in Q2, but management expects acceleration in Q3.