Catenaa, Thursday, July 09, 2026- PepsiCo said consumers pulled back in the second quarter as gas prices rose, slowing its efforts to revitalize its North American snack business.
The maker of Doritos, Lay’s and Gatorade saw a 2% decline in revenue in its North American food business and flat volume after taking action earlier this year to cut prices by as much as 15% in some brands.
“The consumer is worse than what we had anticipated, and it’s driven mainly by gas prices,” Chief Executive Officer Ramon Laguarta said on a call with analysts Thursday.
Laguarta said consumers were pulling back more than the company had expected at convenience stores and other places where people make impulse purchases, due to the higher gas prices.
Shares of PepsiCo fell by 3% on Thursday in New York. The stock has slipped about 4% so far this year, compared with a 9.3% increase in the S&P 500 Index.
PepsiCo has been working to boost sales of its salty snacks and saw signs of an initial rebound earlier this year after slashing prices by up to 15% in medium-sized bags to win back pressured consumers. But that momentum slowed in the second quarter.
“While there have been some signs of progress, the rate of improvement has stalled given the inflationary pressures, challenging consumers’ value equations,” Nik Modi, Co-Head of Global Consumer and Retail Research at RBC Capital Markets, said in a note. He also said he expects PepsiCo will continue to cede market share in beverages to its rivals Coca-Cola and Keurig Dr Pepper.
The company reaffirmed its guidance for the full 2026 fiscal year and said it expected its lower prices would gradually help its turnaround efforts later in the year.
“Our North America business was softer than we anticipated in the second quarter, and we now expect a more gradual improvement in performance trends for the balance of this year,” Chief Financial Officer Steve Schmitt said in prepared remarks.
Gas prices in the US have surged above $4 per gallon due to the ongoing conflict in Iran.
Laguarta said the company was tweaking some of its price reductions, based on differences in how varying segments of the US population shop.
He also said the company had seen some delays in getting more shelf space back at retailers under agreements reached as part of PepsiCo’s decision to lower prices on medium-sized bags.
Recently, it has raised prices on some smaller bags. The company also rolled out more products higher in protein and fiber as it grapples with consumers’ shifting preferences for healthier, less processed foods. Laguarta said the healthier offerings were doing “very well” and that PepsiCo had also seen both volume and revenue growth in multipacks of smaller, portion-controlled snacks.
PepsiCo posted adjusted earnings per share, a measure of profitability that strips out some one-time costs, of $2.20 for the quarter, slightly above the average analyst estimate
