PepsiCo reported third-quarter earnings and revenue that exceeded Wall Street expectations, driven primarily by strong international growth. The company achieved an adjusted earnings per share of $2.34 and revenue of $25.27 billion, both surpassing analysts’ forecasts. Despite this positive performance overall, PepsiCo’s North American segment, its largest market, continued to underperform, weighing heavily on profitability and prompting a full-year earnings forecast cut.

The company now anticipates core earnings per share growth between 2.5% and 3.5%, down from a prior estimate of 5% to 7%. Net revenue growth projections were revised to about 6%, up from an earlier range of 4% to 6%. PepsiCo’s international business, which accounted for 41% of net revenue year-to-date, showed volume growth in almost all regions except for the convenient foods division in Europe, the Middle East, and Africa, which declined slightly.

In North America, beverage volume fell by 2%, and the food division’s volume remained flat, reflecting ongoing challenges. PepsiCo is addressing these issues through innovation, marketing efforts, and product reformulations emphasizing simpler ingredients and functional benefits like protein and fiber. Last February, the company reduced prices on many snack items by up to 15% to regain consumer interest amid budget-conscious shoppers, with positive volume adjustments occurring this year.

CEO Ramon Laguarta acknowledged headwinds from a tough consumer environment and predicted a new wave of inflation due to rising energy costs. To mitigate this, PepsiCo plans to implement price management strategies while maintaining limits to prevent overpricing at retail. The company is also focusing on its beverage portfolio’s growth areas such as functional hydration and zero-sugar drinks, alongside cost-cutting efforts to fund innovation and marketing investments aimed at revitalizing its North American operations.