PEP · Q3 FY2026
PEPSICO INC Q3 FY2026 earnings analysis
By SageNoodle Consumer DeskNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $25.274B | $23.937B (yr ago) | Beat |
| EPS | $2.23 | $1.90 (yr ago) | Beat |
| Free Cash Flow | Not disclosed for the quarter | Not disclosed for the quarter | Miss |
| Gross Margin | 54.4% | 53.6% (yr ago) | Beat |
| Operating Margin | 16.9% GAAP | 14.9% (yr ago, GAAP) | Beat |
What changed
Q3 revenue rose 5.6%, while organic revenue grew 3.1%; PepsiCo raised its full-year reported revenue outlook to approximately 6% growth but cut core EPS growth guidance to 2.5%-3.5%. GAAP operating margin expanded as comparison items helped, while core operating margin contracted 35 basis points and core EPS rose only 2%.
Impact on the investment thesis
Fair value stays at $144.97 per share: a single quarter with faster organic growth does not resolve the weak underlying earnings growth or the margin pressure. The company’s lower core EPS outlook reinforces the existing cautious base case, but does not yet justify a new valuation.
Full analysis: PepsiCo stock: revenue outlook rises as core EPS guidance falls
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