PepsiCo to cut costs as weak North America business hurts annual core profit forecast
PepsiCo is gearing up to implement further cost-cutting measures in response to rising input costs and a slowdown in consumer demand. CEO Ramon Laguarta indicated that actionable strategies would be rolled out shortly to bolster investments. The company has revised its fiscal 2026 core earnings per share growth estimate to a modest 1% to 2%, down from previous figures, while annual organic revenue growth is now anticipated at approximately 3%.
PepsiCo said on Thursday it would pursue additional cost cuts after lowering its annual core profit forecast due to sluggish demand for its snacks and beverages in North America and rising input costs.
Consumer packaged goods makers such as PepsiCo, General Mills, McCormick and Conagra Brands are navigating a tricky environment where surging input costs are straining margins, while cautious spending amid rising gas prices is hurting demand.
"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 ," CEO Ramon Laguarta said in a statement.
Shares of the company were up about 1% in premarket trading.
The company expects fiscal 2026 core earnings per share after adjusting for currency fluctuations to rise 1% to 2%, compared with its prior forecast of low-end of 4% to 6% rise.
It also expects annual organic revenue to be up about 3%, compared with the prior forecast of between 2% and 4%.
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