PepsiCo reported second-quarter earnings that missed analyst expectations on Thursday, as North American consumers tightened spending amid inflation concerns, though revenue still topped forecasts.
The beverage and snacks giant posted adjusted earnings of $2.20 per share, falling short of the $2.21 consensus estimate, according to CNBC. Revenue reached $24.18 billion, beating the $23.95 billion expectation.
CEO Ramon Laguarta attributed the earnings shortfall to domestic weakness. “U.S. food and beverage category performance moderated with consumer budgets tightening due to rising inflationary pressures,” Laguarta said in prepared remarks shared on the company’s website.
The North American beverage segment bore the brunt of the slowdown, with sales declining 7%, according to reporting from CNBC International. This marks a significant headwind for a division that typically drives substantial profit for the company.
The earnings miss reflects a broader consumer pullback. McKinsey research from May 2026 found that 40 to 50 percent of consumers said they expect to spend less over the next three months, signaling persistent budget constraints despite moderating inflation. The Institute of Food Technologists noted that shoppers worn down by inflation and uncertain economic conditions are seeking products that deliver tangible value per dollar.
PepsiCo’s international operations partially offset the domestic slowdown, with strong demand outside North America helping drive the revenue beat. The company’s organic revenue, which excludes acquisitions and currency effects, increased 2.4% in the quarter.
Net income attributable to the company was $2.98 billion, or $2.18 per share, up from $1.26 billion, or 92 cents per share, in the prior-year quarter. The company reiterated its full-year forecast, signaling confidence in the remainder of 2026 despite near-term consumer caution.
Sources
- CNBC — Q2 2026 earnings report, adjusted EPS, revenue, and CEO commentary on consumer budget tightening
- CNBC International — North American beverage sales decline of 7%
- McKinsey & Company — Consumer spending expectations data showing 40-50% expect to spend less
- Institute of Food Technologists — Consumer sentiment on inflation and value-seeking behavior
