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Today at a glance:
🥤 PepsiCo: Gas Prices Bite
🛩️ Delta: Premium Absorbs Fuel Shock
🍪 General Mills: Reinvestment Phase Ends
1. 🥤 PepsiCo: Gas Prices Bite
PepsiCo’s Q2 revenue rose 6% Y/Y to $24.2 billion ($230 million beat), with non-GAAP EPS of $2.20 ($0.01 miss). Organic revenue growth of 2.4% included effective net pricing plus modest volume gains, with FX adding 2.2 points and M&A 1.8 points. Shares fell by more than 3% anyway.
The North American segment disappointed after Q1’s tentative snack rebound:
Frito-Lay volume went flat, and revenue declined 2%, reversing the momentum from Q1’s 2% volume gain.
North American Beverages volume slid 4%, with operating margin down 90 bps.
International remained the engine, projected to top $40 billion in revenue this year, with Asia Pacific Foods delivering double-digit volume growth.
CEO Ramon Laguarta said, “The consumer is worse than what we had anticipated, and it’s driven mainly by gas prices.” US gas prices surged above $4/gallon during Q2 due to the Iran conflict, and Laguarta said the pullback was concentrated in convenience stores and other impulse-purchase channels. PepsiCo is now tweaking its 15% price cuts by segment and has noted delays in regaining the shelf space retailers had promised.
The healthier “permissible portfolio” (protein-fortified snacks, portion-controlled multipacks) hit $3 billion in value and is growing double digits, which Laguarta flagged as a bright spot. Activist Elliott’s pressure to accelerate the turnaround continues in the background.
PepsiCo reaffirmed full-year FY26 guidance, with organic revenue growth of 2–4% and core constant-currency EPS growth of 4–6%, though management flagged that results are likely to land at the low end of the EPS range. Tariff refunds will contribute roughly a full point of EPS growth to offset commodity inflation. The next question is whether the impulse channel recovers as gas prices ease, or whether Frito-Lay needs another pricing reset.