PepsiCo Inc

Solid global momentum; international is the bright spot - Organic revenue +3.1% in Q3 2026 (fastest since Q4 2023); reported revenue >5%. - Global volume: beverages +3%, snacks +4%, food +1% (noted ex-South Africa grains ~+4%). - International: organic revenue +8% and operating margin +105 bps—management emphasized this as *broad-based and structural* (Europe, MENA, Asia, LatAm). - CEO stated international is already ~45% of profit YTD, supporting a sustained growth engine.

North America disappointment remains; execution + beverage underperformance - Foods NA showed improvement (organic sales improved vs Q2), including a turnaround in snacks volume: after prior weakness (low single-digit negative volume growth last year), this year is low single-digit positive due to price reset + innovation + new platforms. - Beverages NA: management is “not pleased”. They’re competing well in hydration and energy, but not competing well in soft drinks. - “Urgency” framing for beverages = raise execution bar (customer negotiations, point-of-sale standards), increase brand investment, and ensure cost focus with resource redeployment toward growth.

Q4 / EPS outlook downgraded mainly due to margin pressure, not sales collapse - Guidance revision driven by margin performance below expectations: input costs trending higher, mix headwind, and tariff benefit in Q3 beverage NA unwinds (creates underlying pressure going forward). - Company intends to sustain investments (not cut growth spend) despite pressure: - A&M increased in both international and North America (explicitly said no resource withdrawal from the business for Q4). - Management also cited actions to partially mitigate margin pressure: - Identify structural cost reduction areas - Use revenue management tools (aiming for benefits to begin helping as the company turns into the calendar year)