PepsiCo Reports Robust Q1 2026 Results: Revenue, EPS Growth, and Dividend Hike
PepsiCo Reports First-Quarter 2026 Results: Strong Revenue & Profit Growth, Dividend Increase
Key Highlights for Investors
- Net Revenue Growth: PepsiCo’s net revenue for Q1 2026 increased by 8.5% year-over-year to \$19.44 billion, fueled by organic revenue growth of 2.6%, a 3.4-percentage-point benefit from foreign exchange translation, and a 2.5-percentage-point net benefit from acquisitions and divestitures.
- Earnings Per Share (EPS): Diluted EPS surged 27% to \$1.70, while core EPS grew 9% to \$1.61. Core constant currency EPS rose 5%.
- Operating Performance: Operating profit climbed 24% to \$3.21 billion, with the operating margin expanding 210 basis points to 16.5%. Core operating profit increased 9% to \$3.05 billion.
- Dividend Increase: PepsiCo affirmed its commitment to shareholder returns, announcing a 4% increase in the annualized dividend per share beginning with the June 2026 payment. This marks the company’s 54th consecutive annual dividend hike.
- Financial Guidance Maintained: PepsiCo reaffirmed its fiscal 2026 guidance, projecting organic revenue growth of 2–4% and core constant currency EPS growth of 4–6%. Total cash returns to shareholders are expected to reach approximately \$8.9 billion (including \$7.9 billion in dividends and \$1.0 billion in share repurchases).
Segment Performance
- North America: Both PepsiCo Foods and Beverages segments delivered sequential acceleration in net and organic revenue growth. Volume gains in Foods were driven by innovation and affordability initiatives. Beverages volume also improved.
- International: All international segments performed well, delivering sequential acceleration in net revenue growth. Asia Pacific Foods, EMEA, and International Beverages Franchise showed robust organic revenue growth, while Latin America Foods remained resilient.
- Profit Drivers: Productivity savings, effective net pricing, and foreign exchange translation contributed to growth, partially offset by increases in certain operating costs.
Condensed Financial Statements
Income Statement (12 Weeks Ended March 21, 2026 vs. March 22, 2025)
| Metric |
Q1 2026 |
Q1 2025 |
Change |
| Net Revenue |
\$19,443M |
\$17,919M |
+8.5% |
| Operating Profit |
\$3,213M |
\$2,583M |
+24% |
| Net Income Attributable to PepsiCo |
\$2,327M |
\$1,834M |
+27% |
| Diluted EPS |
\$1.70 |
\$1.33 |
+27% |
| Core EPS |
\$1.61 |
\$1.48 |
+9% |
| Core Constant Currency EPS |
– |
– |
+5% |
| Operating Margin |
16.5% |
14.4% |
+210 bps |
Cash Flow & Balance Sheet
- Free Cash Flow: Free cash flow conversion ratio expected to be at least 80% for fiscal 2026.
- Capital Spending: Expected to remain below 5% of net revenue.
- Cash & Equivalents: Ended Q1 2026 with \$10.55 billion in cash and equivalents, up from \$8.32 billion in Q1 2025.
- Total Assets: \$110.65 billion, up from \$107.40 billion at end of 2025.
- Total Liabilities: \$89.11 billion.
- Shareholders’ Equity: \$21.38 billion.
Fiscal 2026 Guidance & Outlook
- Organic revenue growth: 2–4%
- Core constant currency EPS growth: 4–6%
- Core annual effective tax rate: ~22%
- Capital spending: below 5% of net revenue
- Free cash flow conversion ratio: at least 80%
- Total cash returns to shareholders: ~\$8.9 billion (dividends \$7.9B, share repurchases \$1.0B)
- Foreign exchange translation expected to benefit reported net revenue and core EPS by ~1 percentage point
- Acquisitions (net of divestitures) from 2025 expected to add 1 percentage point to reported net revenue growth in 2026
- Net revenue growth implied in range of 4–6%, core EPS growth 5–7% (includes anticipated impact of global minimum tax regulations)
Important Shareholder Information & Price-Sensitive Matters
- Dividend Increase: The 4% dividend hike effective June 2026 is a significant positive for income investors and demonstrates confidence in ongoing cash generation.
- Affirmed Guidance: Maintaining robust growth targets for revenue and EPS, alongside disciplined capital spending and high free cash flow conversion, signals continued strength in PepsiCo’s business model.
- Segment Outperformance: Strong international and North American segment performance, especially volume growth in foods and beverages, indicate broad-based demand recovery and successful execution of innovation and affordability strategies.
- Risks & Forward-Looking Statements: The company notes several risk factors, including commodity price volatility, currency fluctuations, regulatory changes, supply chain disruptions, and global minimum tax regulations, which could impact future performance and share price.
Non-GAAP Measures & Reconciliation
PepsiCo uses non-GAAP measures (organic revenue, core results, constant currency, free cash flow) for internal management and investor transparency. These measures adjust for mark-to-market gains/losses, restructuring charges, acquisition/divestiture impacts, and foreign exchange effects. Investors should note these measures may differ from those used by other companies and are not a substitute for GAAP metrics.
Upcoming Investor Events
- Prepared management remarks and business update will be posted online at PepsiCo’s investor site.
- Live Q&A webcast with management scheduled for April 16, 2026, at 8:15 a.m. Eastern Time.
Disclaimer
This article contains information derived from PepsiCo’s official Q1 2026 financial filings. Forward-looking statements are subject to risks and uncertainties, including those described in the company’s SEC filings. Investors should not rely exclusively on forward-looking statements as actual results may differ. The author is not responsible for investment decisions made based on this information.
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