New York, Feb 4, 2026, 12:11 (EST) — Regular session
Shares of PepsiCo (PEP.O) jumped 2.5%, reaching $166.85 by midday Wednesday.
On Tuesday, the snack-and-soda giant announced plans to slash U.S. prices on key snack lines like Lay’s and Doritos by as much as 15%. This rollback comes after consumers pushed back against previous increases. The price cuts coincide with moves by consumer staples firms to lower entry points amid inflation and postponed food-stamp benefits, which are tightening household budgets. (Reuters)
During the earnings call, CEO Ramon Laguarta pointed to “the biggest friction … is affordability” for certain shoppers, describing the pricing changes as targeted. CFO Steve Schmitt told analysts the company is “playing offense” in North American snacks. Meanwhile, Laguarta noted PepsiCo is “betting a lot on portion control” amid the rise of GLP-1 weight-loss drugs.
PepsiCo posted fourth-quarter revenue of $29.34 billion and core EPS of $2.26, beating analyst forecasts, MarketWatch reported. Volume slipped 2% during the quarter, but price increases helped drive sales higher, the company said.
PepsiCo stuck to its 2026 targets in its latest earnings release, projecting organic revenue growth between 2% and 4%, and core constant-currency EPS growth of 4% to 6%. The company clarified organic revenue excludes currency fluctuations and deal impacts, while core EPS strips out select items. These targets point to about 5% to 7% core EPS growth, paired with a 4% dividend increase to $5.92 per share. Additionally, PepsiCo announced a fresh $10 billion buyback authorization extending through Feb. 28, 2030. (PepsiCo)
A filing revealed that PepsiCo submitted its quarterly results via Form 8-K on Feb. 3. (Securities and Exchange Commission)
In its prepared remarks, the company outlined a broader reset: repositioning Lay’s, Tostitos, Gatorade, and Quaker, with product tweaks focused on “simpler ingredients.” They’re also rolling out new options in hydration, whole grains, protein, and fiber. Management indicated that productivity gains will help cover the increased spending.
The move toward value pricing coincides with warnings from other food companies about uncertain demand. Mondelez and Chipotle saw their shares dip on Wednesday following cautious 2026 forecasts, citing weak demand and rising input costs. This highlights the challenge brands face trying to protect volumes without sacrificing margin. (Reuters)
Several banks raised price targets following the results but maintained mostly neutral-to-positive views. Barclays, JPMorgan, and Morgan Stanley were among those boosting their targets in early notes seen by MarketScreener. (MarketScreener)
The trade-off is obvious: price cuts may boost unit sales, but margins take a hit if volumes don’t bounce back quickly or if retailers ignore recommended prices. PepsiCo is also adapting to changing eating habits, such as smaller portion sizes as weight-loss drugs become more common.
Traders are keeping an eye on how fast new shelf prices appear this week and if snack sales pick up as stores complete resets in March and April. The next key moment comes with any early data on North America snacks and beverages ahead of the higher dividend kicking off with the June payment.
