MW PepsiCo snaps streak of profit declines, and boosts dividend by 4%

By Tomi Kilgore

Beverage and snack giant's stock pulls back, as outlook for profit growth was lowered

PepsiCo's stock was set to pull back after a lowered profit-growth outlook, despite an earnings beat and a raised dividend.

Shares of PepsiCo pulled back in early trading Tuesday, after the beverage and snack giant beat fourth-quarter earnings expectations, amid strength in its international businesses, and boosted its dividend, but lowered its outlook for profit growth.

Volume, or the number of products sold, declined from a year ago, as weakness in convenient foods offset gains in beverages. Increased pricing, however, helped revenue grow more than Wall Street had projected.

The stock $(PEP)$ was down 1.2% in premarket trading, after closing the previous session at an 11-month high.

Net income rose 67% from a year ago to $2.54 billion, and core EPS, which excludes nonrecurring items, increased to $2.26 from $1.96, beating the average analyst EPS estimate compiled by FactSet of $2.24. That snapped a three-quarter streak of core EPS declines.

Revenue grew 5.6% to $29.34 billion, above the FactSet consensus of $28.98 billion, as effective net pricing increased 4.5% while volume declined 2%.

Among PepsiCo's business segments, revenue from foods in the North America region rose 1.5% and beverages were up 4%. Revenue from both Latin America foods and Europe, Middle East and Africa (EMEA) saw double-digit percentage increases.

The company said it still expects 2026 organic revenue growth, which excludes acquisitions, of between 2% and 4%, but the growth guidance for core EPS was lowered to between 4% and 6% from 5% to 7%.

The company raised its dividend by 4% to $5.92 a share from $5.69 a share. Based on Monday's closing price of $155.20, the new annual dividend implies a dividend yield of 3.81%, which compares with the current dividend yield for rival Coca-Cola Co. $(KO)$ of 2.71% and the implied yield for the S&P 500 index SPX of 1.14%.

The company also announced a new $10 billion share-repurchase program, which represents 4.7% of the market capitalization as of Monday's close.

PepsiCo's stock has gained 3.3% over the past 12 months through Monday, while Coca-Cola shares have rallied 18.9% and the S&P 500 has advanced 16.4%.

-Tomi Kilgore

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February 03, 2026 07:21 ET (12:21 GMT)

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