PepsiCo (PEP) posted third quarter results that beat Wall Street's expectations on Thursday but lowered its profit outlook as the company works to regain momentum in the US market.
"We continue to operate with a high sense of urgency to sustainably improve the company's financial and marketplace performance (most notably in North America)," PepsiCo CEO Ramon Laguarta said in prepared remarks.
PepsiCo's revenue grew 5.6% year over year to $25.27 billion, just beating the Street's expectations of roughly $25 billion. Adjusted earnings per share came in at $2.34, slightly higher than the $2.29 per share expected, per Bloomberg consensus data. Tariff refunds amounted to $178 million in the third quarter.
For fiscal year 2026, the company now expects net revenue to come in at the high end of its range, up approximately 6%. But PepsiCo lowered its forecast for core earnings per share growth to 2.5%-3% growth, down from the low end of a 5%-7% range.
The stock rose 1% in premarket trading following the results.
The company said it saw results from innovation around portion control, multipack offerings, protein, fiber, and simpler ingredients, with strong performance from its NKD, Doritos Protein, and Lays Baked with Olive Oil products. On the beverage side, lower-sugar Gatorade and zero-sugar Pepsi Treats drove results.
However, the company reiterated plans to raise prices this year by 15% to offset higher input costs. Earlier this year, Pepsi lowered prices, which led its North America core operating margin to decline by 280 basis points.
PepsiCo also signaled it was working to cut costs heading into the end of the year.
"Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation," Laguarta said.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.