PepsiCo lowered its growth outlook after third-quarter results exposed uneven expansion, margin pressure and weaker demand across parts of its North American portfolio.
PepsiCo has spent much of this year trying to prove that its brands can still grow in a cautious consumer market, but the latest quarter showed a business that is expanding unevenly and facing heavier profit pressure. The company said third-quarter organic revenue rose 1.3%, while net revenue slipped 0.6%. That was enough to reassure investors that demand has not fallen away, but not enough to dispel concerns about margins, inflation and slower category growth in North America.
The numbers also showed that PepsiCo is leaning more heavily on its international business. According to the company’s results, international markets continued to outpace the United States, even as geopolitical tensions and a difficult operating environment weighed on some regions. Ramon Laguarta, the chief executive, said the company would keep investing in commercial activity and brand support while also pushing productivity measures to strengthen competitiveness.
That split matters because PepsiCo’s North American portfolio remains under strain. The company said category performance was subdued in the region, particularly in some beverage lines, even as it worked to stimulate demand with pricing, marketing and product support. The result is a familiar challenge for large consumer companies: holding onto volume without giving up too much profit through discounts or higher spending.
The latest quarter also prompted a reset on expectations. PepsiCo said it now sees only low-single-digit organic revenue growth for the rest of the year, a step down from the roughly 4% pace it had previously signalled. For 2025, the company has pointed to low-single-digit organic growth and mid-single-digit core constant-currency earnings-per-share growth, suggesting that sales should keep moving, but profits may advance more slowly.
That caution has fed into Wall Street’s view of the stock. Goldman Sachs, according to TheFly, cut its price target on PepsiCo to $165 from $180 while keeping a Buy rating, arguing that the company’s near-term outlook was less exciting than its quarter itself. Even so, Goldman still sees PepsiCo as a long-term story, helped by the resilience of its brands and the possibility that higher sales, cost savings and a better macro backdrop could eventually bring earnings back into line.
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