PepsiCo reported first-quarter revenue of $19.44 billion, an 8.5% increase year on year that cleared the $18.94 billion analyst consensus. Adjusted earnings per share came in at $1.61, beating estimates of $1.55.
Why it matters: PepsiCo’s results are a bellwether for consumer spending in the United States, and the volume recovery suggests that shoppers are responding to lower prices after two years of food price inflation.
Price cuts reverse volume decline
The headline number was Frito-Lay North America. Volume in the combined food division rose 2% in the quarter, the first positive reading in more than two years. The turnaround came after PepsiCo rolled back prices on Doritos, Lay’s, Tostitos, and other flagship brands in late 2025.
CEO Ramon Laguarta said the company had “reset the value equation” with consumers. Promotional activity increased, and pack sizes were adjusted to hit lower price points at convenience stores and dollar channels.
Beverages lag behind
Not everything worked. The North American beverage segment saw volumes decline 2.5% in the quarter. The Pepsi cola brand continued to lose share to Coca-Cola’s core range, and the recently acquired Poppi prebiotic soda brand has not yet moved the needle at scale.
International operations were the bright spot. Asia Pacific and Europe, Middle East and Africa food divisions both delivered 9% volume gains.
Margins expand sharply
Operating profit rose 24% to $3.21 billion. Operating margin expanded 210 basis points to 16.5%, helped by lower commodity costs and supply chain efficiencies. Management left full-year targets unchanged at 2% to 4% organic revenue growth and 4% to 6% core constant-currency EPS growth.
Shares rose 3% in pre-market trading on the results.