North America Weakness Leaves A Narrower Path To Guidance

Research evidence excerpt

North America Weakness Leaves A Narrower Path To Guidance

Non-Alcoholic Beverages

PepsiCo

TD SECURITIES (USA) LLC EARNINGS UPDATE

July 10, 2026

Price: $137.86 (07/9/2026) North America Weakness Leaves A Narrower

Price Target: $145.00 (Prior $150.00) Path To Guidance

HOLD (2)

Robert Moskow THE TD COWEN INSIGHT

646 562 1474

PepsiCo reported a weaker quality 2Q than expected with org sales of 2.4% missing by 20 bps

robert.moskow@tdsecurities.com

due to North America. The change in guidance to the low end of 4-6% EPS growth came as a

Seamus Cassidy surprise too given a 1% benefit from tariff refunds and what had looked like a deep reservoir

646 562 1319 of cost savings. Guidance for org growth to accelerate to 2H sounds tough given persistent

seamus.cassidy@tdsecurities.com

affordability issues in Frito-Lay.

Victor Ma

646 562 1306 Questions About PFNA Execution Persist (33% of profits)

victor.ma2@tdsecurities.com

PFNA org growth of -2% (vol flat) missed our estimate by 150 bps and profit -8% missed by a

Sergio Matsumoto lot. Management's rather generic explanation attributed it to weaker consumer spending in

646 562 1339

the convenience channel due to higher gas prices. Management emphasized the success of

sergio.matsumoto@tdsecurities.com

their permissible product portfolio and the restoration of volume growth from affordability

Jacob Henry, CFA investments. They expect sequential improvement in 2H as they "optimize" their returns on

646 562 1380 promotions and address delays of their commercial activities at certain customers.

jacob.henry@tdsecurities.com

Our Take. The 2Q results represent a step backward in PFNA's turnaround and not what we

Key Data

would expect from a "full court press" of commercial activities on a highly scaled business.

Symbol NASDAQ: PEP