PepsiCo Q3 2025 earnings: international growth helps offset North American pressure
PepsiCo (PEP) reported its fiscal third quarter results, showing a still-healthy earnings beat and revenue that rose modestly, even as the company contends with softer demand at home. The blended strength across international markets helped cushion a decline in North America, underscoring a familiar theme for the global snack and beverage giant: growth outside the United States is increasingly driving the top and bottom lines.
Key numbers and what they mean
The company posted adjusted earnings per share of $2.29, topping Wall Street expectations of $2.26 per share. Revenue came in at $23.94 billion, ahead of the consensus estimate of $23.83 billion. On a reported basis, PepsiCo earned $2.6 billion in net income, or $1.90 per share, down from $2.93 billion, or $2.13 per share a year earlier. The divergence between GAAP and adjusted figures highlights the impact of one-off items and the company’s ongoing focus on core earnings power.
Organic growth and volume trends
Excluding the effects of acquisitions, divestitures and foreign exchange, PepsiCo’s organic revenue rose 1.3% in the quarter. While the headline revenue growth is modest, the company notes that pricing and mix are contributing to margin resilience. PepsiCo’s worldwide volume, covering both foods and beverages, declined by 1% in the quarter when pricing and FX are stripped out. This pattern points to softer consumer demand or competitive pressure in certain markets, even as the company benefits from product reformulations and portfolio discipline in other regions.
Segment highlights: North America vs. international momentum
In North America, PepsiCo faced ongoing volume declines, a hurdle the company has been wrestling with in recent quarters. The North American Foods segment—covering items like Doritos, Quaker Oats, and Pearl Milling—saw volume fall 4% in the quarter. The North American Beverages unit declined 3% in volume, though executives described “improved momentum” in beverages as the quarter progressed. These trends contrast with stronger performances outside the U.S., where international growth has helped offset domestic softness.
What’s driving international strength?
PepsiCo’s global footprint remains a key engine for earnings in 2025. The company has pursued strategic pricing, product innovation, and increased distribution in high-growth markets. By expanding into new channels and adapting its portfolio to regional tastes, PepsiCo aims to sustain top-line gains even as some mature markets tighten consumer spending. This international resilience is a major factor behind the company’s adjusted EPS beat for Q3 2025.
Outlook and strategic implications
PepsiCo reaffirmed its full-year outlook, expecting core constant-currency earnings per share to be roughly flat year-over-year and organic revenue to grow by a low single-digit percentage. The guidance signals a conservative but feasible path that relies on a mix of price realization, efficiency measures, and continued international growth. In the near term, investors will be watching for progress in U.S. volume recovery and the effectiveness of cost-cutting initiatives designed to preserve margins amid a softer domestic demand environment.
What this means for investors
For shareholders, the Q3 2025 results reinforce the importance of PepsiCo’s international exposure. While North American gains remain essential, the company’s ability to translate international momentum into earnings gains provides a buffer against domestic headwinds. The confirmation of the full-year outlook offers some visibility, but execution in the core U.S. market and disciplined capital allocation will be key to sustaining returns in the coming quarters.
Conclusion
PepsiCo’s third-quarter performance demonstrates a balanced narrative: solid earnings delivery and a modest revenue beat amid a softening volume backdrop in North America, supported by healthier international growth. As the company continues investing in brands and pursuing efficiency, investors will weigh the pace of domestic recovery against the expanding footprint and profitability of its global operations.
