Pepsi's soda demand remains strong, quarterly revenue exceeds market expectations

Special Topic: Focus on Q4 2025 US Stock Earnings Reports

PepsiCo reported fourth-quarter revenue exceeding market expectations on Tuesday, driven by strong demand for its soda products in international markets and the solid performance of low-sugar beverages in the US market.

Although PepsiCo is adjusting its product portfolio in the US to cater to changing consumer tastes, growing demand for locally flavored snacks and sodas in markets such as India and Brazil has continued to boost the company's sales.

In December last year, PepsiCo announced an evaluation of its North American supply chain. A few weeks earlier, activist investment firm Elliott Management had increased its stake in PepsiCo and urged the underperforming food business to implement major reforms.

PepsiCo has maintained its previously announced annual core earnings per share growth target of 5% to 7% from December last year.

Affected by inflation and issues such as delayed food stamp benefits due to last year's US government shutdown, American consumers have been tightening their spending and looking for value. Like other consumer companies such as Procter & Gamble and Coca-Cola, PepsiCo has shifted its focus to entry-level, lower-priced products and smaller package sizes.

PepsiCo's North American beverage business is undergoing a refresh, launching prebiotic sodas and various low- and zero-sugar beverage products.

The company's core North American food business continues to see declining sales, with a 1% year-over-year decrease in the fourth quarter, compared to a 4% decline in the previous three quarters.

According to data compiled by the London Stock Exchange Group, in the fourth quarter ended December 27, the maker of Gatorade achieved revenue of $29.34 billion, above the market's previous expectation of $28.97 billion.

PepsiCo's international beverage business saw a 3% year-over-year increase in sales, while overall beverage segment sales rose 1% year-over-year.

Editor: Guo Mingyu