PepsiCo beats Wall Street's earnings forecast thanks to chip discounts

American PepsiCo, one of the world's largest producers of soft drinks and food products, recorded quarterly profits and revenues above market expectations. The Wall Street Journal reports that measures to revitalize the snack business have helped, which have started to have an effect.

The company's net income for the fiscal quarter ended March 21 jumped 27% year-over-year to $1.7 per share from $1.33. Earnings excluding one-time factors rose 9% to $1.61 per share, beating the FactSet consensus forecast. It stood at $1.54. PepsiCo's quarterly revenue grew 8.5% to $19.44 billion, while Wall Street expected the figure at $18.95 billion. Organic sales growth (excluding currency fluctuations and M&A transactions) amounted to 2.6%.

In the reporting period, the company recorded sales growth in the salty snacks segment (Doritos and Lay's brands) as efforts to win back customers began to pay off. Measures included price cuts across the portfolio - in some cases up to 15% - and major lineup refreshes of key brands such as Lay's chips and Gatorade sports drinks, WSJ points out.

"We are encouraged by the resilience of the international business, while the North American division continued to make progress in the first quarter," said PepsiCo CEO Ramon Laguarta. The steps taken are paying off and have contributed to the improved performance, he said.

Responding to retailer pressure and loss of shelf space due to high prices, PepsiCo announced in December 2025 that it would reduce its product mix in the U.S. and lower prices. The change of course was helped by activist investor Elliott Investment Management, which last year consolidated a stake in PepsiCo for about $4 billion and began demanding that the company's management cut costs and make products more affordable for consumers.

PepsiCo reaffirmed its financial outlook for the current year, assuming organic revenue growth of 2-4% and EPS growth of 4-6% excluding currency fluctuations. As the macroeconomic environment has become more turbulent and uncertain, the company will "focus on controlling what it can influence," including innovation and brand development, Laguarta promised.

Shares of PepsiCo at the premarket in New York rose by 1%, exceeding the mark of $156 per paper. From the beginning of the year to the close of trading on April 15, the company's quotes added 7.9%, outperforming the U.S. stock market as a whole.

Earlier this week British bank Barclays lowered its price target on PepsiCo shares from $160 to $154, keeping its neutral rating (Equal Weight), which corresponds to the recommendation not to buy, but not to sell the securities. According to FactSet data, more than half of industry experts - 13 out of 24 - now adhere to such position in relation to PepsiCo. At the same time, the number of analysts recommending to buy PepsiCo securities significantly exceeds the number of those suggesting to sell (nine against two).

This article was AI-translated and verified by a human editor