PepsiCo (NASDAQ: PEP) delivered a stronger-than-expected set of first-quarter results, with CEO Ramon Laguarta providing the most upbeat commentary about the company’s North American food recovery in several quarters and confirming that the strategic decision to cut prices on brands including Lay’s and Doritos is generating meaningful volume growth at a time when the broader consumer packaged goods sector has struggled to rebuild demand lost during the post-pandemic inflation cycle.
The company reported adjusted earnings per share of $1.61, ahead of the $1.55 analyst consensus, on revenue of $19.44 billion, which exceeded the $18.89 billion estimate and represented an 8.5 percent increase from the same period a year earlier, a performance that sent shares up approximately two percent in afternoon trading on the day of release.
The standout number was in the PepsiCo Foods North America segment, which had been under significant competitive and volume pressure throughout 2025 as consumers pushed back against elevated snack prices and sought out private label alternatives. The unit reported volume growth of 2 percent in Q1, the first positive reading in multiple quarters and the direct consequence of the discounting programme the company implemented at major grocery retailers ahead of spring shelf resets.
“We feel good about where we are at this point in the journey,” Laguarta said on the company’s earnings conference call. “Still, in the process of all the shelf resets and launching the innovation — I would say by the end of Q2, we’d probably be almost completed in that process. But the early reads are quite exciting.”
The recovery in North American food volumes stood in contrast to a softer performance in the North American beverage division, which reported a 2.5 percent volume decline in the quarter as competition from energy drink brands and changing consumer habits continued to weigh on the carbonated soft drink category, an ongoing structural challenge the company has been addressing through acquisitions and reformulation rather than pricing adjustments.
PepsiCo reiterated its full-year guidance at the results, maintaining a forecast range of $8.465 to $8.628 in adjusted earnings per share, a decision that analysts interpreted as a sign of management confidence that the volume recovery is sustainable rather than a one-quarter anomaly driven by temporary promotional activity.
The company did include a note of caution in its shareholder communication, describing the global economy as having become more “volatile and uncertain” as a consequence of the war in the Middle East, a reference to the impact of elevated energy and input costs on manufacturing and logistics operations that PepsiCo shares with most of the large consumer staples sector.
The $10 billion share buyback programme approved in February remains active, and PepsiCo’s annual dividend was raised by four percent to $5.92 per share earlier in the year, positioning the stock as an income-oriented holding that analysts at UBS have maintained a Buy rating on with a price target of $186, implying meaningful upside from current levels around the high $150s.
