PepsiCo's next earnings report will test whether an early rebound in its North American business is turning into a durable recovery.

The maker of Lay's, Doritos, Pepsi, and Gatorade is scheduled to report second-quarter results before the market opens Thursday. Wall Street analysts polled by FactSet expect the company to report net revenue of $23.96 billion, up 5.4% from a year earlier, and adjusted earnings of $2.21 a share, an increase of 4.2%.

The stock is largely flat for the year, but has fallen sharply from its mid-February high.

PepsiCo, like many packaged-food companies, is facing a difficult environment in the U.S. market. Consumers remain price-sensitive after years of inflation and are increasingly seeking products with less sugar, simpler ingredients, and more protein or fiber.

Meanwhile, higher commodity and energy costs threaten to pressure margins. Management said in April that it generally had six to 12 months of hedges on some inputs, but expected additional inflation from geopolitical turmoil.

Through its engagement with activist investor Elliott Investment Management, PepsiCo is cutting prices on selected products, expanding more affordable pack sizes, refreshing major brands like Lay's and Tostitos, and launching new products such as Doritos Protein.

The company reported a solid first quarter that gave investors hope the turnaround was beginning to gain traction.

Net revenue increased 8.5%, while organic revenue -- excluding the impact of currency movements, acquisitions, and divestitures -- grew by 2.6%. The North American snack segment, home to Frito-Lay and Quaker, grew organic revenue by 1% as volume increased 2%.

The beverage business reported 9% growth in net-revenue growth, largely driven by PepsiCo's added distribution of Alani Nu and the acquisition of poppi, partially offset by the transition of its case pack water business in North America to a third--party partner and the divestiture of Rockstar.

The company has closed plants and eliminated manufacturing lines, and those cost savings have helped offset higher advertising and marketing spending. In the first quarter, adjusted earnings actually rose 9% from a year ago to $1.61 a share.

Investors will watch whether the snack segment's volume growth continues, whether the beverage segment returns to positive volume growth, and whether the investments in portfolio innovation and marketing can continue without sacrificing margins.

For full-year fiscal 2026, PepsiCo management expects organic revenue to grow between 2% and 4% and core earnings to increase between 4% and 6% in constant currency.

Write to Evie Liu at evie.liu@barrons.com

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July 08, 2026 16:00 ET (20:00 GMT)

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