PEP · 10-Q · 2026Q3 · Full report
Operating Margin Drivers
PEPSICO INC · 2026-10-08 · Importance 46 · Surprise 56 · In source text
Consolidated operating profit increased 19% to $4.260 billion in the 12 weeks and 45% to $11.496 billion in the 36 weeks ended September 5, 2026; operating margin rose 2.0 percentage points to 16.9% and 4.4 points to 16.7%, respectively. Quarterly operating profit growth primarily reflected productivity savings, effective net pricing, a favorable impact from acquisition- and divestiture-related charges and credits, a 4-percentage-point favorable tariff-refund impact, and net mark-to-market gains, partly offset by operating cost increases and higher advertising and marketing. PBNA operating profit rose 45% for the quarter and 416% for 36 weeks, with the latter comparison substantially reflecting the prior-year Rockstar impairment; quarterly PBNA drivers included Poppi-related acquisition and divestiture charges/credits and a 23-percentage-point favorable net impact of global tariffs and higher commodity costs. IB Franchise operating profit rose 29% for the quarter and 22% for 36 weeks, while EMEA rose 25% and 47%, LatAm Foods 47% and 28%, and Asia Pacific Foods 15% and 62%, respectively; prior-year brand impairments, productivity savings, pricing, FX and cost changes varied by segment.
Key facts
- For the 36 weeks ended September 5, 2026, PBNA operating profit increased 416%, reflecting the prior-year Rockstar impairment, poppi acquisition-related charges/credits, lower restructuring charges, productivity savings, a 6-percentage-point favorable net impact of global tariffs (including refunds) and higher commodity costs, and effective net pricing; operating cost increases, lower organic volume and higher advertising and marketing partly offset the increase. source
- For the 12 weeks ended September 5, 2026, PBNA operating profit increased 45%, driven by poppi acquisition-related charges/credits, a 23-percentage-point favorable net impact of global tariffs (including refunds) and higher commodity costs, and productivity savings; cost increases, lower organic volume, higher advertising and marketing and higher restructuring charges partly offset the increase. source
- For the 36 weeks ended September 5, 2026, Asia Pacific Foods operating profit increased 62%, primarily reflecting a prior-year Be & Cheery impairment charge, productivity savings, organic volume growth and a 6-percentage-point impact of lower commodity costs; operating cost increases partly offset the increase. source
- For the 12 weeks ended September 5, 2026, LatAm Foods operating profit increased 47%, primarily reflecting a prior-year indirect tax audit settlement, productivity savings, revenue growth, a 9-percentage-point favorable foreign exchange impact and a 6-percentage-point impact from certain Brazilian indirect tax credits; operating cost increases partly offset the increase. source
- Consolidated operating profit increased 45% for the 36 weeks ended September 5, 2026, primarily due to productivity savings, prior-year Rockstar and Be & Cheery brand impairment charges, effective net pricing and a favorable net impact of acquisition and divestiture-related charges/credits, partly offset by operating cost increases. source
- For the 36 weeks ended September 5, 2026, EMEA operating profit increased 47%, primarily reflecting revenue growth, productivity savings and a prior-year Rockstar impairment charge, partly offset by operating cost increases. source
- For the 36 weeks ended September 5, 2026, LatAm Foods operating profit increased 28%, primarily reflecting productivity savings, revenue growth, a 12-percentage-point favorable foreign exchange impact driven mainly by the Mexican peso, and a prior-year indirect tax audit settlement; operating cost increases partly offset the increase. source
- For the 12 weeks ended September 5, 2026, EMEA operating profit increased 25%, primarily reflecting effective net pricing, productivity savings and lower restructuring charges, partly offset by operating cost increases. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | positive | realized | — | For the 36 weeks ended September 5, 2026, PBNA operating profit increased 416%, reflecting the prior-year Rockstar impairment, poppi… |