PepsiCo NASDAQ:PEP, the maker of Doritos, Lay's and Gatorade, reported softer second-quarter trends as tighter U.S. consumer budgets slowed its North American turnaround effort. The company posted a 2% revenue decline in its North American food business, while volume was flat after earlier price cuts of up to 15% on some brands designed to win back pressured shoppers.
Chief Executive Officer Ramon Laguarta said results were weighed down as U.S. food and beverage category performance moderated under rising inflationary pressure. PepsiCo still delivered adjusted earnings per share of $2.20, slightly ahead of the average analyst estimate, but RBC Capital Markets' Nik Modi noted that the pace of improvement appears to have stalled and said the company may continue losing beverage share to Coca-Cola, the soft-drink maker, and Keurig Dr Pepper, the beverage company behind packaged drinks and coffee products.
Chief Financial Officer Steve Schmitt said PepsiCo's North America business was weaker than expected in the second quarter, with improvement now likely to be more gradual through the rest of 2026. For investors, the update suggests PepsiCo's lower-price strategy may take longer to support the turnaround, even as the company reaffirmed its full-year 2026 guidance, while shares fell 1.5% in Thursday premarket trading in New York after slipping about 1% this year through Wednesday's close versus a 9.3% gain for the S&P 500.