PepsiCo CEO Says Early Reads Of Reset In North America Are 'Very Exciting' – Beverage Giant’s Q1 Report Tops Estimates

• PepsiCo’s North American food business registered its first volume growth in more than two years, with the company crediting its innovation and price cuts for the increase.
• The company reported a 2% year-on-year jump in revenue and volume in the North American market in Q1.
• Laguarta expressed optimism about the reactions of brands and consumers to the company’s reset in the North American market.

PepsiCo Inc. (PEP) CEO Ramon Laguarta on Thursday stated that the early reads from the company’s shelf reset in North America are “very exciting,” after the beverage giant’s first-quarter (Q1) results beat Wall Street estimates.

Laguarta stated that the company expects to complete the shelf reset process by the end of the second quarter (Q2).

“When you go down to the North America foods business, this was a holistic commercial study focused on growth. There was some additional value to the consumer. There was more space. There was a restage of some of the key brands like Lays and Tostitos,” Laguarta stated.

PepsiCo’s North American food business registered its first volume growth in more than two years, with the company crediting its innovation and price cuts for the increase. PepsiCo reported a 2% year-on-year revenue and volume jump in Q1 in the North American market.

PepsiCo shares were up nearly 1% in Thursday’s pre-market trade.

Volume Growth A Result Of Multiple Initiatives

Laguarta highlighted that the volume growth that the North American business experienced during the fourth quarter (Q4) and Q1 was a result of multiple strategic initiatives that the company began executing on. This includes price cuts, multi-packs, more shelf space, and more, he said.

“When you see the 2% volume growth, it is a combination of all these elements, you know, more value in some of the core brands… multi-packs and multi-serve is one lever, but it's a much more holistic [approach]. We feel good about where we are at this at this point in the journey,” Laguarta added.

The company expects to complete these initiatives by the end of the second quarter (Q2).

“The productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier,” Laguarta said.

The PepsiCo CEO expressed optimism about the reactions of brands and consumers to the company’s reset in the North American market.

No Major Supply Chain Issues From Iran War Yet

PepsiCo CFO Steve Schmitt added that the company is not currently experiencing any major supply chain issues due to the war in Iran.

“We've had no major issues from a supply chain standpoint. We're seeing really nice continuity there. The teams are managing it well. I think in times like these, the scale of PepsiCo Inc is really an advantage,” Schmitt said.

He added that PepsiCo has hedges in place for six to 12 months, giving the company some near-term visibility. However, he still expects an inflationary impact due to the Iran war, but noted that the quantum is unclear yet.

Laguarta credited the supply chain's resilience to the initiatives the company took after the COVID-19 pandemic.

Gatorade With Up To 75% Less Sugar

PepsiCo also announced a pivot toward healthier options across its beverage portfolio, including a restaging of Gatorade, as it looks to tap into on-trend innovations to boost volumes.

The company announced Gatorade with 75% less sugar and no artificial colors, as well as another version of the energy drink that helps consumers stay hydrated longer. PepsiCo also stated that it will phase out artificial colors from its Gatorade portfolio.

PepsiCo Q1 Tops Estimates

PepsiCo reported an earnings per share (EPS) of $1.61 on revenue of $19.44 billion, compared to Wall Street estimates of an EPS of $1.54 on revenue of $18.94 billion, according to Fiscal.ai data.

The company reported organic revenue growth of 2.6% during the quarter.

PepsiCo also reaffirmed its fiscal year 2026 guidance, expecting organic revenue growth of 2% to 4%.

How Did Retail Traders React?

Retail sentiment on Stocktwits around PepsiCo trended in ‘bullish’ territory, with message volumes at ‘high’ levels as of this writing.

One user on the platform called the earnings and guidance good.

PEP stock is up 8% year-to-date. The S&P 500 ETF (SPY) is up 30% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 39%.

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