PepsiCo, Inc.

PepsiCo said first-half net revenue grew almost 7%, reported EPS grew 6%, and constant-currency EPS grew 3%. Global volumes increased 3% in foods and 2% in beverages, the fastest volume growth since 2022. In North America, management said Q2 was softer than expected, with PBNA operating margin down about 90 basis points in the quarter, driven by gross profit rate pressure. International was strong, with management saying the business grew 7% and operating margin rose by a full point in Q2. For the rest of the year, PepsiCo reaffirmed full-year guidance, expects international to stay strong, North America to improve gradually, and said the year may skew toward the low end of the EPS range; tariff refund claims are expected to add about 1 full point of EPS growth for the year.

Ramon Laguarta framed the quarter as a tale of two businesses: strong international momentum and improving U.S. food volume, but weaker-than-expected North America execution and consumer traffic in gas-dependent channels. He repeatedly emphasized the three U.S. growth pillars: affordability, portfolio transformation, and away-from-home expansion, saying the company is seeing progress and does not need a strategic reset. His tone was confident but practical, stressing that PepsiCo will keep investing in growth while tweaking tactics by channel and customer.

Steve Schmitt focused on the first-half financial picture and the back-half bridge. He highlighted first-half net revenue up almost 7%, reported EPS up 6%, and constant-currency EPS up 3%, while noting softer North America performance in Q2 and continuing strength internationally. He said tariff refund claims should contribute about 1 full point of EPS growth for the year, commodity pressures will remain a headwind, and the company will keep driving productivity while also increasing North America advertising and marketing in the second half; he said full-year guidance is reaffirmed, but likely toward the low end of the EPS range.

Analysts pressed on why PFNA and PBNA volumes lagged expectations, whether PepsiCo needs more affordability or innovation, and whether the company should make a bigger earnings tradeoff to revive North America. Management said the strategic logic of affordability remains intact, but execution needs tweaks by channel and customer, and the biggest near-term issue was weaker consumer behavior tied to higher gas prices and softer impulse-channel conversion. They also said some space gains and shelf expansions are still rolling in, away-from-home should accelerate in the second half, and North America profit should improve more in PBNA than in foods.