PepsiCo, Inc.

Q3 performance: solid topline acceleration, especially internationally (good) - Organic net revenue grew 3.1% (fastest growth rate since Q4 2023); reported revenue >5%. - Core operating profit +3%, EPS +2%. - Global volume trends: beverages +3%, snacks +4% (with note that a South Africa grains impact affects the “global snacks” comps); foods +1%. - International delivered strong momentum: organic revenue +8% and operating margin +105 bps.

2026 Q4 guidance/EPS reset: margin pressure is the main driver (bad) - Company reduced Q4 EPS guidance while expecting robust sales/topline—i.e., the hit is margin, not revenue. - Key contributors to margin pressure: - Input costs trending higher (hedges/insulation rolling off later in the year). - Mix headwind (mentioned explicitly). - Tariff benefit in Q3 beverages North America that will not repeat, creating underlying pressure for Q4. - Management stressed they will keep investing for growth despite margin softness.

Investment + cost actions: “revenue management tools” and structural cost reductions (opportunity/mitigating actions) - To partially mitigate margin pressure in Q4 and position for improvement into 2027: - Sustain/raise A&M investments (including double-digit A&M in North America for foods + beverages, plus increased international A&M). - Identify structural cost reduction areas and use revenue management tools. - Push “quantity and quality” in A&M: - Reduce spend not linked to growth (e.g., overheads, corporate unallocated). - Improve ROI via more data-driven marketing capability (partnership with Publicis mentioned). - CEO framed “urgency” as aggressive cost review + investing behind brands that drive growth and raising execution standards (customer negotiation and point-of-sale execution).