PepsiCo Q2 2026 Earnings: $24.2 Billion Revenue and 137% EPS Surge Even as North America Beverage Volume Slides 4%

On July 9, 2026, PepsiCo reported second-quarter revenue of $24.2 billion, up 6.4% year over year, and diluted EPS of $2.18, up 137% — even as beverage volume in PepsiCo Beverages North America fell 4%. The catch sits one line down in the release: core EPS grew just 4%. This is a quarter where the GAAP print and the operating print tell opposite stories, and the ledger is how you keep them straight.

Correction (2026-10-03): the original version of this post stated rounded, unsupported figures carried over from the ledger's first bootstrap ($23.0B revenue, $2.59B net income, $2.48 EPS, 55.0% gross margin, a calendar quarter ending June 30, and a synthetic segment table). Every number below now comes from the Q2 2026 earnings release and 10-Q above, and the open_ledger/pepsico ledger was rebuilt from PepsiCo's own 10-Ks and Q2 10-Q — revenue is $24,181M (+6.4%), net income attributable to PepsiCo $2,981M (+136.0%), diluted EPS $2.18 (+137.0%), and the quarter was the 12 weeks ended June 13, 2026 on PepsiCo's 52/53-week calendar. The 4% North America beverage volume decline was the one figure the original post had right.

The Headline Numbers​

PepsiCo's fiscal year ends the last Saturday of December on a 52/53-week calendar; Q2 2026 was the 12 weeks ended June 13, 2026. Every figure below is from the primary filings cited in Sources.

Revenue growth of 6.4% decomposes cleanly in the release: 2.4% organic growth, a 2.2-percentage-point benefit from foreign exchange translation, and a 1.8-point net benefit from acquisitions and divestitures. Organic growth itself came from effective net pricing plus a genuine contribution from organic volume — global convenient-foods volume rose 3% and global beverage volume 2%. This is not a quarter where price masked shrinking quantities at the company level, whatever happened inside North America beverages.

Profit is a different story. Net income more than doubled because the prior-year quarter carried a $1,860M impairment charge against the Rockstar and Be & Cheery brands, while this quarter carried none. Strip out items affecting comparability and core EPS grew 4% — real, but two orders of magnitude smaller than the headline. Gross margin even compressed about 40 basis points to 54.2%, so pricing did not fully cover cost pressure; the release says core operating margin contracted 40 basis points as operating cost increases partly offset productivity savings and pricing. The ledger forces that distinction to be explicit: the income-statement block below reconciles every dollar of the $2,981M, and none of it comes from a revenue line that outran its costs.

Revenue Deep Dive​

Segment detail comes from the same 10-Q that feeds the ledger, with organic and volume splits from the release. PepsiCo now reports six divisions — North America foods and beverages are each their own segment, and the old Quaker/AMESA structure is gone. The thesis for this quarter is geographic: international carried it while North America foods shrank.

North America is a split screen. Foods revenue fell 2% on flat volume — the release says convenient-foods net revenue declined on lower effective net pricing even as the business gained volume market share through innovation and affordability initiatives. In other words, PepsiCo bought share with price in salty snacks. Beverages grew revenue 7% while volume fell 4%, and the release attributes the growth primarily to acquisitions made in 2025 plus organic growth — the +6-point gap between reported and organic is the acquisition contribution. Volume down, revenue up, and the bridge is deals plus price.

International did the heavy lifting everywhere at once. Latin America printed +15% reported (+4% organic) on flat volume with a sequential improvement in organic volume trends; EMEA grew 10% (+6% organic) with volume up in both foods and beverages; Asia Pacific Foods grew 12% (+9% organic) on a standout +10% foods volume; and the International Beverages Franchise grew 11% (+9% organic) on +5% beverage volume. Chairman and CEO Ramon Laguarta's comment ties it together: "Our second quarter results featured strong organic volume and net revenue growth for the global convenient foods and global beverages businesses. Year-to-date, PepsiCo's global organic volume has increased at the highest rate since 2022 — aided by the strength of the international business." That international strength is visible in the ledger's single Revenue line only as a total — the release's division cut is what shows the U.S. foods business shrinking while four international segments grew double digits.

The Margin Story​

Margins at PepsiCo oscillate around impairments, and this quarter is the upswing of that cycle. Operating margin hit 16.6% against 7.9% a year ago — an 875-basis-point expansion the release attributes to the lapped Rockstar and Be & Cheery impairment, lower restructuring charges, and a favorable net impact of acquisition and divestiture-related items. The mechanism is mechanical, not operational: Q2 2025's $1,860M impairment sat between SG&A and operating profit, and its absence this quarter flows straight through. Core operating margin, which excludes those items, actually contracted 40 basis points to 16.8%.

The five-year row tells the same story at lower frequency. FY2025 operating margin troughed at 12.2% under a $1,993M impairment charge — the largest in this window — while FY2022's 13.3% absorbed a $3,166M impairment partly offset by the $3,321M Juice Transaction gain. Gross margin is the steadier series, drifting between 53.0% and 54.6% as pricing and commodity costs take turns leading; this quarter's −40 basis points fits that range rather than breaking it. Net margin at 12.3% looks rich against the 8.8–10.4% annual band, but second quarters carry no full-year impairment allocation — compare it to Q2 2025's 5.6%, which carried one, and the print is a lap, not a new level.

The One Big Question: Is the 137% a Lap or Leverage?​

The defining question this quarter is how much of the 137% EPS surge is repeatable operating performance and how much is the arithmetic of lapping a charge. The release answers it with unusual precision: items affecting comparability explain 133 of the 137 percentage points, foreign exchange 3 points, and core constant-currency growth just 1 point.

A company growing core constant-currency EPS 1% while GAAP prints +137% is being flattered by its comparison base, full stop. The bull version of this quarter says the 1% is depressed by transitory cost pressure and the volume recovery — global foods +3%, beverages +2%, NA foods share gains — is the leading indicator. The bear version says a staples giant growing organic revenue 2.4% with contracting core margins paid for volume with price in its largest foods market and is one FX reversal away from flat. Both fit the same ledger; the income statement cannot adjudicate between them because both describe the same $2,981M. What settles it is the second half: management affirmed full-year 2026 guidance, so the 1% core number has to accelerate for the guide to hold. Watch PFNA organic growth and core operating margin in Q3 — if foods turns positive and core margin stops contracting, the lap criticism fades; if not, the 137% was the story and the story is over.

Tracking a $93.9B company in plain text​

Double-entry forces every dollar to reconcile, which is why the Beancount ledger is the audit. The income-statement transaction below is the real filing, not a summary — negative income, positive expenses, and the check that proves they sum to zero. In staples accounting, price and volume are not separate lines — they are embedded in Revenue and CostOfRevenue, so a claimed pricing power has to show up as a better gross margin, and this quarter it modestly did not: 54.2% against 54.7% a year ago.

; Revenue: 24181 | CoR: 11070 | SG&A: 9088
; Pension income: 59 | Interest: 230 | Tax: 848 | NCI: 23 | Net Income: 2981
; Check: -24181 + 11070 + 9088 - 59 + 230 + 848 + 23 + 2981 = 0 ✓
 
2026-06-13 * "PepsiCo, Inc." "FY2026Q2 Income Statement"
  Income:Revenue                         -24181 MUSD
  Expenses:CostOfRevenue                   11070 MUSD
  Expenses:SellingGeneralAdministrative     9088 MUSD
  Income:OtherNet                            -59 MUSD  ; other pension and retiree medical benefits income
  Expenses:OtherNet                           230 MUSD  ; net interest expense and other
  Expenses:IncomeTax                          848 MUSD
  Expenses:OtherNet                            23 MUSD  ; net income attributable to noncontrolling interests
  Equity:Adjustments                         2981 MUSD  ; net income attributable to PepsiCo offset

That block is not an illustration; it is the period that was validated with bean-check and pushed to open_ledger/pepsico. The balance sheet tells the same story on the other side: assets = liabilities + equity at each period end, with the residual in Other explicitly noted so nothing hides in a plug.

The balance-sheet number that tells the narrative is goodwill at $19.1 billion — up just $177M from year-end 2025 even though the release credits 2025 acquisitions for much of PBNA's growth. PepsiCo is not buying growth to offset the volume decline; the deals it did were tuck-ins that barely register on a $112.2 billion balance sheet, and nothing new landed in Q2. The ledger's pad/balance pairs show the same goodwill reconciling period to period, so a claimed organic quarter is verifiable — goodwill does not jump when management says growth came from pricing, mix, and last year's deals. Through Q2 2026, it does not. The question for the second half is whether the consumer keeps paying more per liter while buying fewer of them in North America beverages, or whether the −4% volume print is the leading edge of elasticity.

The Multi-Year Arc​

The five-year arc is a staples company compounding revenue about 4.3% a year — from $79.5 billion to $93.9 billion — while net income wobbles with the impairment cycle: $7.6 billion, $8.9 billion, $9.1 billion, $9.6 billion, then $8.2 billion in FY2025 under that year's $1,993M charge. (FY2022's extra fifty-third week flatters its growth rate slightly.) Total assets grew from $92.4 billion to $107.4 billion over the same span, and the ledger forces every step of that expansion to reconcile — revenue is a single line that must tie to expenses, and assets must equal liabilities plus equity at each real fiscal year-end, not a calendar placeholder. Through Q2 2026, they do. The question for the second half is whether net margin recovers toward its 10% band on volume-led growth rather than another favorable lap.

The Verdict: Bull vs. Bear​

Bull Case

• Volume is positive globally: convenient foods +3% and beverages +2% organic volume — growth is not just price this quarter.
• International is firing on every cylinder: LatAm +15%, APAC +12%, IB Franchise +11%, EMEA +10% reported, all with organic volume growth or improving trends.
• North America foods gained volume share: innovation and affordability initiatives are working even as pricing went the wrong way.
• Core EPS still grew 4%: beneath the lap, productivity savings and pricing more than covered cost increases at the operating line.
• Guidance affirmed: management is willing to own the full year, which disciplines the bear case that Q3 falls off a cliff.

Bear Case

• 133 of 137 EPS points are comparability items: core constant-currency EPS grew 1% — the headline is almost entirely the lapped impairment.
• PFNA shrank 2% reported and organic: the only division in decline, and it is the largest foods business in the portfolio.
• PBNA beverage volume fell 4%: revenue grew on deals and price while selling fewer drinks — the elasticity question in one number.
• Core operating margin contracted 40 bps: cost pressure is outrunning pricing power at the core, not just the GAAP, level.
• NA foods net revenue fell on lower pricing: buying share with price works until a competitor matches it, and then it is just margin.

Our Take

Our take: the quarter is a lap wearing a growth costume, but the costume fits better than the 1% core number suggests. PepsiCo's 137% EPS surge will not repeat — it cannot, since the $1,860M charge it laps is gone — yet underneath it sits genuine volume growth in every international segment, share gains in North America foods, and an affirmed full-year guide. The bull case needs PFNA to turn positive and core margins to stabilize in Q3; the bear case needs PBNA volume to print −5% and prove the −4% was demand destruction rather than a trade-off. We lean cautiously bullish because global volume growth at a staples giant is rarer than a favorable lap, and this quarter has both — but we would not pay for 137% anything. For now, it is a staples company growing the right way abroad and buying time at home, and the plain-text ledger lets you verify that, dollar for dollar.