PepsiCo (NYSE:PEP) reports its second-quarter 2026 earnings before market open on 9 July, and the stakes are clear: investors want to know whether the company’s North American foods business can regain momentum after recent analyst commentary suggested a stall, and whether beverage pricing power can hold in the face of intensifying competition.
Analysts are expecting Pepsi to print an EPS of $2.21 versus $2.12 a year ago, representing year-over-year growth of 3.3%. Revenue is forecast at $23.96 billion, up 5.44% from the prior year.
The PepsiCo share price sits 1.36% higher YTD leading in to the print, although there has been plenty of whipsaw throughout the year. PEP began the year on a high, adding 20% through the first two months of the year, before fading back 20% into the end of June. This past week has built a little momentum in the days approaching earnings, with shares having added 6.4% since the turn of the month.
What to Watch
- EPS: $2.21 (versus $2.12 year-ago, +3.3%)
- Revenue: $23.98 billion (vs $22.73 bn, +5.44%)
- Analyst count: 16
- EPS estimate range: $2.14 to $2.55
- Revenue estimate range: $23.67 billion to $24.18 billion
The most important number in this report may not be the headline EPS figure, it is the trajectory of North American foods revenue and whether management signals confidence in a recovery or warns of continued pressure.
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According to recent analyst commentary from RBC, PepsiCo’s progress in its North American foods business likely stalled in the second quarter amid high gas prices. UBS Securities echoed similar concerns, noting that top-line trends in North America showed pressure in May and early June.
That matters because North American foods including Frito-Lay, Quaker, and other snack and breakfast brands, has historically been a stable cash generator. If volume growth remains weak and pricing power fades, the margin profile of the entire company comes under scrutiny.
On the beverage side, pricing discipline will be the key question. Coca-Cola operates an asset-light model focused on brand marketing and concentrate sales, while PepsiCo’s model includes more integrated bottling and distribution. That structural difference affects how quickly each company can respond to shifts in consumer behaviour and input cost inflation.
Margin sustainability is the third critical watch point. Cost inflation across logistics, ingredients, and labour has pressured packaged food companies for several quarters. If gross margin contracted materially or operating margin missed expectations, the stock could face pressure regardless of whether EPS met the headline estimate.
Options markets are pricing a move of ~4% in Pepsi shares either way on the print, setting the tone for the second half of calendar 2026.
