SECURITIES AND EXCHANGE COMMISSION

Transcript

1. #1prepared remarks

   EX-99.1 2 q320268-kxexhibit991.htm EX-99.1

2. #2Chairman and CEO Ramon

   Our third-quarter results featured strong net revenue growth, an acceleration in organic revenue growth with organic volume growth across both global beverages and convenient foods. The results reflect the scale and resilience of the international business, the ongoing evolution of the global portfolio and an improved presence in underpenetrated channels and occasions,

3. #3prepared remarks

   Organic revenue performance,

4. #4prepared remarks

   Third-Quarter Results Discussion • Net revenue increased 5.6% due to 3.1% organic revenue growth, a 1.7-percentage-point net benefit from acquisitions and divestitures and a 0.7-percentage-point benefit from foreign exchange translation. Organic revenue growth reflects the benefits associated with effective net pricing and a contribution from organic volume growth. ◦ In North America, convenient foods net revenue trends improved sequentially, reflecting savory snacks volume growth and volume market share improvement, offset by lower effective net pricing. The beverages business delivered 5 percent net revenue growth, primarily reflecting the benefits of acquisitions made in 2025. ◦ The international businesses performed well with each segment delivering strong net revenue growth - aided by organic volume growth within Asia Pacific Foods, International Beverages Franchise and Latin America Foods.

5. #5prepared remarks

   • Operating profit increased 19% and operating margin expanded 195 basis points, primarily reflecting a favorable net impact of acquisition and divestiture-related charges/credits and a favorable impact of net mark-to-market gains on commodity derivatives. Core operating profit increased 3%, with core operating margin contracting 35 basis points. The core operating profit performance reflects productivity savings, effective net pricing and a 4-percentage-point favorable impact of tariff refunds. These impacts were partially offset by certain operating cost increases and higher advertising and marketing expenses. • EPS increased 17% and core EPS increased 2%, primarily driven by operating profit growth. Year-to-Date Results Discussion • Net revenue increased 6.7% due to 2.7% organic revenue growth, a 2.0-percentage-point benefit from foreign exchange translation and a 2.0-percentage-point net benefit from acquisitions and divestitures. Organic revenue growth reflects the benefits associated with effective net pricing and a contribution from organic volume growth. ◦ In North America convenient foods, organic volume and volume market share increased aided by innovation and afford…

6. #6prepared remarks

   Summary Third-Quarter 2026 Performance | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | | Volume (a) | | GAAP Reported % Change | Percentage Point Impact | Organic % Change | | % Change | | Foreign Exchange Translation | Acquisitions and Divestitures | | Convenient Foods | Beverages | PepsiCo Foods North America (PFNA) | — | — | — | — | | — | | PepsiCo Beverages North America (PBNA) | 5 | — | (6) | — | | | (2) | International Beverages Franchise (IB Franchise) | 8 | (1) | — | 7 | | | 5 | Europe, Middle East and Africa (EMEA) | 8 | 1 | — | 9 | | (1) | 4 | Latin America Foods (LatAm Foods) | 14 | (8) | — | 6 | | 3 | | Asia Pacific Foods | 10 | (1) | — | 9 | | 11 | | Total | 6 | (1) | (2) | 3 | | 1 | 3 |

7. #7prepared remarks

   | | | | | | | | | | | | | | | | Operating Profit and EPS | | GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | | Items Affecting Comparability | Foreign Exchange Translation | PFNA | (13) | 1 | — | (12) | PBNA | 45 | (41) | — | 4 | IB Franchise | 29 | (19) | (1.5) | 9 | EMEA | 25 | (8) | 2 | 19 | LatAm Foods | 47 | (27) | (9) | 10 | Asia Pacific Foods | 15 | (1) | (2) | 12 | Corporate unallocated expenses | (10) | 15 | — | 5 | Total | 19 | (16) | (1) | 2.5 | | | | | | EPS | 17 | (15) | (1) | 1.5 |

8. #8prepared remarks

   Organic revenue performance,

9. #9prepared remarks

   Summary Year-to-Date 2026 Performance | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | | Volume (a) | | GAAP Reported % Change | Percentage Point Impact | Organic % Change | | % Change | | Foreign Exchange Translation | Acquisitions and Divestitures | | Convenient Foods | Beverages | PFNA | — | — | — | — | | 1 | | PBNA | 7 | — | (6) | 1 | | | (3) | IB Franchise | 10 | (2) | — | 8 | | | 4 | EMEA | 11 | (3) | — | 7 | | 3 | 2 | LatAm Foods | 15 | (11) | — | 4.5 | | — | | Asia Pacific Foods | 11 | (3) | — | 9 | | 10 | | Total | 7 | (2) | (2) | 3 | | 3 | 2 |

10. #10prepared remarks

    | | | | | | | | | | | | | | | | Operating Profit and EPS | | GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | | Items Affecting Comparability | Foreign Exchange Translation | PFNA | (8) | — | — | (8) | PBNA | 416 | (413) | — | 3 | IB Franchise | 22 | (7) | (2) | 13 | EMEA | 47 | (29) | (2) | 17 | LatAm Foods | 28 | (10) | (12) | 6 | Asia Pacific Foods | 62 | (32) | (4) | 25 | Corporate unallocated expenses | (13) | 16 | — | 3 | Total | 45 | (40) | (2) | 3 | | | | | | EPS | 47 | (42) | (2.5) | 2 |

11. #11prepared remarks

    (a) Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume change on net revenue performance disclosed in the Organic Revenue Performance table on page A-7, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

12. #12prepared remarks

    Organic revenue performance,

13. #13prepared remarks

    Guidance and Outlook The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts. PepsiCo’s current and previous fiscal 2026 outlook is summarized below. Fiscal 2026 Guidance ( changes are bolded & italicized below) | | | | | | | | | | Current | Previous | Organic Revenue | Approximately +3% | +2% to +4% | Foreign Exchange Translation (a) | Approximately +1.5% to net revenue and core EPS growth | Approximately +1% to net revenue and core EPS growth | Acquisitions, net of Divestitures (b) | Approximately +1.5% to net revenue growth | Approximately +1% to net revenue growth | Net Revenue | Approximately +6% | +4% to +6% | Core Annual Effective Tax Rate (c) | Approximately 21% | Approximately 22% | Core Constant Currency EPS | +1% to +2% | Low-end of +4% to +6% | Core EPS | +2.5% to +3.5% | Low-end of +5% to +7% | Capital Spending | Below 5% of net revenue | Below 5% of net revenue | Free Cash Flow Conversion Ratio | At least 80 percent | At least 80 percent | Cash Returns to Shareholders (d) | $8.9 bi…

14. #14prepared remarks

    (a) Assumptions are based on current foreign exchange rates, as we are unable to predict the impact of exchange translation rates. (b) Refers to acquisitions, net of divestitures, that occurred in 2025. (c) Includes the anticipated impact of global minimum tax regulations. (d) Comprised of dividends of $7.9 billion and share repurchases of $1.0 billion. Prepared Management Remarks and Live Question and Answer Webcast At approximately 6:00 a.m. (Eastern time) on October 8, 2026, the Company will post prepared management remarks (in pdf format) regarding its third quarter results and business update, including its outlook for 2026, at https://www.pepsico.com/investors. At 8:15 a.m. (Eastern time) on October 8, 2026, the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company’s website at https://www.pepsico.com/investors. | | | | | | | | | | | | Contacts: | Investor Relations | | Communications | | investor@pepsico.com | | pepsicomediarelations@pepsico.com |

15. #15prepared remarks

    PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Income (in millions, except per share amounts, unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | 12 Weeks Ended | | 36 Weeks Ended | | 9/5/2026 | | 9/6/2025 | | 9/5/2026 | | 9/6/2025 | Net Revenue | $ | 25,274 | | | $ | 23,937 | | | $ | 68,898 | | | $ | 64,582 | | Cost of sales | 11,520 | | | 11,113 | | | 31,302 | | | 29,343 | | Gross profit | 13,754 | | | 12,824 | | | 37,596 | | | 35,239 | | Selling, general and administrative expenses | 9,494 | | | 9,122 | | | 26,100 | | | 25,305 | | | | | | | | | | Impairment of intangible assets (a) | — | | | 133 | | | — | | | 1,993 | | Operating Profit | 4,260 | | | 3,569 | | | 11,496 | | | 7,941 | | Other pension and retiree medical benefits (expense)/income | (114) | | | 26 | | | 3 | | | 91 | | Net interest expense and other | (242) | | | (264) | | | (773) | | | (788) | | Income before income taxes | 3,904 | | | 3,331 | | | 10,726 | | | 7,244 | | Provision for income taxes | 834 | | | 713 | | | 2,314 | | | 1,504 | | Net income | 3,070 | | | 2,618 | | | 8,412 | | | 5,740 | | Less: Net income attributable to noncontrolling interests | 22 | | | 15 …

16. #16prepared remarks

    (a) For the 12 and 36 weeks ended September 6, 2025, we recognized charges primarily related to the impairment of our Rockstar brand. A - 1

17. #17prepared remarks

    PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (in millions, unaudited)

18. #18prepared remarks

    | | | | | | | | | | | | | 36 Weeks Ended | | 9/5/2026 | | 9/6/2025 | Operating Activities | | | | Net income | $ | 8,412 | | | $ | 5,740 | | Depreciation and amortization | 2,531 | | | 2,315 | | Impairment and other charges | — | | | 1,960 | | | | | | | | | | | | | | Operating lease right-of-use asset amortization | 531 | | | 489 | | Share-based compensation expense | 240 | | | 207 | | Restructuring and impairment charges | 367 | | | 567 | | Cash payments for restructuring charges | (373) | | | (554) | | Acquisition and divestiture-related charges/credits | (254) | | | 308 | | Cash payments for acquisition and divestiture-related charges | (24) | | | (80) | | Pension and retiree medical plan expenses | 227 | | | 164 | | Pension and retiree medical plan contributions | (355) | | | (400) | | Deferred income taxes and other tax charges/credits | 663 | | | 30 | | | | | | Tax payments related to the Tax Cuts and Jobs Act | (965) | | | (772) | | Change in assets and liabilities: | | | | Accounts and notes receivable | (2,124) | | | (1,747) | | Inventories | (588) | | | (449) | | Prepaid expenses and other current assets | 27 | | | (223) | | Accounts payable and …

19. #19prepared remarks

    PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (continued) (in millions, unaudited)

20. #20prepared remarks

    | | | | | | | | | | | | | 36 Weeks Ended | | 9/5/2026 | | 9/6/2025 | Financing Activities | | | | Proceeds from issuances of long-term debt | $ | 2,978 | | | $ | 8,179 | | Payments of long-term debt | (2,328) | | | (3,245) | | | | | | Short-term borrowings, by original maturity: | | | | More than three months - proceeds | 4,562 | | | 5,528 | | More than three months - payments | (3,817) | | | (5,417) | | Three months or less, net | 1,365 | | | 445 | | Cash dividends paid | (5,935) | | | (5,692) | | Share repurchases | (739) | | | (752) | | Proceeds from exercises of stock options | 107 | | | 76 | | Withholding tax payments on restricted stock units and performance stock units converted | (96) | | | (112) | | Other financing | (1) | | | (18) | | Net Cash Used for Financing Activities | (3,904) | | | (1,008) | | Effect of exchange rate changes on cash and cash equivalents and restricted cash | (175) | | | 395 | | Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash | 1,524 | | | (382) | | Cash and Cash Equivalents and Restricted Cash, Beginning of Year | 9,204 | | | 8,553 | | Cash and Cash Equivalents and Restricted Cash, End of Period | $ | 1…

21. #21prepared remarks

    PepsiCo, Inc. and Subsidiaries Condensed Consolidated Balance Sheet (in millions, except per share amounts) | | | | | | | | | | | | | (unaudited) | | | | 9/5/2026 | | 12/27/2025 | ASSETS | | | | Current Assets | | | | Cash and cash equivalents | $ | 10,675 | | | $ | 9,159 | | Short-term investments | 488 | | | 371 | | Accounts and notes receivable, net | 13,623 | | | 11,506 | | Inventories: | | | | Raw materials and packaging | 2,792 | | | 2,581 | | Work-in-process | 175 | | | 143 | | Finished goods | 3,467 | | | 3,121 | | | 6,434 | | | 5,845 | | Prepaid expenses and other current assets | 1,339 | | | 1,068 | | Total Current Assets | 32,559 | | | 27,949 | | Property, Plant and Equipment, net | 29,731 | | | 29,905 | | Amortizable Intangible Assets, net | 1,165 | | | 1,219 | | Goodwill | 18,884 | | | 18,916 | | Other Indefinite-Lived Intangible Assets | 13,977 | | | 13,847 | | | | | | Investments in Noncontrolled Affiliates | 2,215 | | | 2,038 | | Deferred Income Taxes | 4,328 | | | 4,541 | | Other Assets | 9,117 | | | 8,984 | | Total Assets | $ | 111,976 | | | $ | 107,399 | | | | | | LIABILITIES AND EQUITY | | | | Current Liabilities | | | | Short-term…

22. #22in

    Items Affecting Comparability

23. #23prepared remarks

    Impairment and other charges We recognized impairment charges primarily as a result of our quantitative assessments of certain of our indefinite-lived intangible assets, related to the Rockstar and Be & Cheery brands . Indirect and income tax impact We recognized additional expenses related to an indirect and income tax audit settlement in our LatAm Foods segment. Pension and retiree medical-related impact Pension and retiree medical-related impact includes settlement charges related to lump sum distributions exceeding the total of annual service and interest costs, as well as net curtailment losses. Effective net pricing: Reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries. Free cash flow: Net cash from operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending (capital spending less cash proceeds from sales of property, plant and equipment) is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and nece…

24. #24prepared remarks

    PepsiCo, Inc. and Subsidiaries Reconciliation of GAAP and Non-GAAP Information Organic Revenue Performance 12 and 36 Weeks Ended September 5, 2026 (dollars in millions, unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12 Weeks Ended 9/5/2026 | | PFNA | | PBNA | | IB Franchise | | EMEA | | LatAm Foods | | Asia Pacific Foods | | Total | Reported Net Revenue, GAAP measure | $ | 6,504 | | | $ | 7,706 | | | $ | 1,401 | | | $ | 5,413 | | | $ | 3,021 | | | $ | 1,229 | | | $ | 25,274 | | Impact of foreign exchange translation (a) | 10 | | | 11 | | | (14) | | | 42 | | | (214) | | | (13) | | | (178) | | Impact of acquisitions and structural changes | — | | | (428) | | | — | | | — | | | — | | | — | | | (428) | | Organic Revenue, non-GAAP measure (b) | $ | 6,514 | | | $ | 7,289 | | | $ | 1,387 | | | $ | 5,455 | | | $ | 2,807 | | | $ | 1,216 | | | $ | 24,668 | | | | | | | | | | | | | | | | Prior Year Reported Net Revenue, GAAP measure | $ | 6,526 | | | $ | 7,327 | | | $ | 1,291 | | | $ | 5,022 | | | $ | 2,656 | | | $ | 1,115 | | | $ | 23,937 | | Impact of divestitures | — | | | (15) | | | — | | | — | | | — | | | — | | | (15) | | …

25. #25prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 36 Weeks Ended 9/5/2026 | | PFNA | | PBNA | | IB Franchise | | EMEA | | LatAm Foods | | Asia Pacific Foods | | Total | Reported Net Revenue, GAAP measure | $ | 19,204 | | | $ | 21,340 | | | $ | 3,748 | | | $ | 13,219 | | | $ | 7,895 | | | $ | 3,492 | | | $ | 68,898 | | Impact of foreign exchange translation (a) | (13) | | | (11) | | | (71) | | | (390) | | | (721) | | | (83) | | | (1,289) | | Impact of acquisitions and structural changes | (54) | | | (1,245) | | | — | | | — | | | — | | | — | | | (1,299) | | Organic Revenue, non-GAAP measure (b) | $ | 19,137 | | | $ | 20,084 | | | $ | 3,677 | | | $ | 12,829 | | | $ | 7,174 | | | $ | 3,409 | | | $ | 66,310 | | | | | | | | | | | | | | | | Prior Year Reported Net Revenue, GAAP measure | $ | 19,215 | | | $ | 19,999 | | | $ | 3,418 | | | $ | 11,946 | | | $ | 6,865 | | | $ | 3,139 | | | $ | 64,582 | | Impact of divestitures | — | | | (37) | | | — | | | — | | | — | | | — | | | (37) | | Prior Year Organic Revenue, non-GAAP measure (b) | $ | 19,215 | | | $ | 19,962 | | | $ | 3,418 | | | $ | 11,946 | | | $ | 6,865 | | | $ | 3,139 | | | $ | 64,54…

26. #26prepared remarks

    (a) Represents the adjustment needed to reflect translation of revenue using prior-year period foreign currency exchange rates. (b) Represents underlying amount, not in accordance with GAAP, used in the calculation of Organic Revenue Performance, which is a financial measure that is not in accordance with GAAP. See pages A-5 through A-6 for further discussion. (c) A financial measure that is not in accordance with GAAP. See pages A-5 through A-6 for further discussion. (d) Excludes the impact of acquisitions and divestitures. In certain instances, the impact of organic volume change on net revenue performance differs from the unit volume change disclosed in the Summary Third-Quarter 2026 Performance table and Summary Year-to-Date 2026 Performance table on pages 3 and 4 respectively, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

27. #27prepared remarks

    Note – Amounts may not sum due to rounding. A - 7

28. #28prepared remarks

    PepsiCo, Inc. and Subsidiaries Reconciliation of GAAP and Non-GAAP Information (continued) Certain Line Items by Segment 12 Weeks Ended September 5, 2026 (dollars in millions, unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PFNA | | PBNA | | IB Franchise | | EMEA | | LatAm Foods | | Asia Pacific Foods | | Corporate Unallocated Expenses | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reported Cost of Sales, GAAP measure | $ | 2,578 | | | $ | 3,540 | | | $ | 409 | | | $ | 3,044 | | | $ | 1,233 | | | $ | 731 | | | $ | (15) | | | $ | 11,520 | | | | Mark-to-market net impact | — | | | — | | | — | | | — | | | — | | | — | | | 15 | | | 15 | | | | Restructuring and impairment charges | (2) | | | (5) | | | — | | | (3) | | | 1 | | | — | | | — | | | (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Core Cost of Sales, non-GAAP measure (a) | $ | 2,576 | | | $ | 3,535 | | | $ | 409 | | | $ | 3,041 | | | $ | 1,234 | | | $ | 731 | | | $ | — | | | $ | 11,526 | | | | | | | | | | | | | | | | | …

29. #29prepared remarks

    (a) A financial measure that is not in accordance with GAAP. See pages A-5 through A-6 for further discussion. (b) Represents the adjustment needed to reflect translation of operating profit using prior-year period foreign currency exchange rates.

30. #30prepared remarks

    Note – Amounts may not sum due to rounding. A - 8