Shares of PepsiCo, Inc. (NASDAQ: PEP) gained 4% on Tuesday after the company beat expectations on revenue and earnings for the fourth quarter of 2025. It also reaffirmed its outlook for fiscal year 2026. The food and beverage behemoth is working on revamping its portfolio and improving affordability to drive growth in its business.
Q4 numbers beat estimates
PepsiCo reported net revenue of $29.3 billion for the fourth quarter of 2025, which was up nearly 6% from the previous year and ahead of estimates of $28.9 billion. Organic revenues grew 2.1%. GAAP earnings per share increased 68% year-over-year to $1.85. Core EPS grew 16% to $2.26, beating the consensus target of $2.24.
Portfolio revival and affordability
As part of its efforts to improve its competitiveness and drive growth, PepsiCo is focusing on refreshing its portfolio and introducing new products. The company continues to roll out new flavors as well as zero sugar options for its trademark soft drink brands. It is also providing healthy options in beverages such as prebiotics and functional hydration offerings.
Pepsi Zero Sugar saw double-digit revenue growth and market share gains in Q4. Poppi prebiotics soda is seeing retail sales growth and market share improvements while Pepsi Prebiotic will expand its distribution nationally.
PEP is broadening its snacks portfolio to include products with no artificial colors or flavors, fiber and whole grain offerings, and protein-packed meat snacks within brands such as Doritos, Quaker and Sun Chips. The company has also decided to lower prices by as much as 15% on brands such as Lay’s, Doritos, Cheetos, and Tostitos to improve affordability for customers. PepsiCo expects these actions to help drive better financial performance from the first quarter of 2026.
Outlook
For fiscal year 2026, PepsiCo expects net revenues to grow 4-6% and organic revenue to increase 2-4%. Core EPS is estimated to grow 5-7%. The company aims to return approx. $8.9 billion to shareholders during the fiscal year.
