PepsiCo, Inc. announced certain commercial and financial priorities to enhance shareholder value, including a preliminary 2026 financial outlook. The announcement followed a comprehensive review of PepsiCo's strategic initiatives and plans (overseen by its board of directors).

"Today, we are announcing our plans and initiatives that aim to accelerate organic revenue growth, deliver record productivity savings and improve core operating margin – starting in 2026," said Ramon Laguarta, chairman and CEO of PepsiCo. "PepsiCo Foods North America will play a critical role towards achieving these targets and we feel encouraged about the actions and initiatives we are implementing with urgency to improve both marketplace and financial performance."

This announcement incorporates constructive engagement and is supported by PepsiCo shareholder Elliott Investment Management.

"We appreciate our collaborative engagement with PepsiCo's management team and the urgency they have demonstrated," said Marc Steinberg, partner at Elliott. "We believe the plan announced today to invest in affordability, accelerate innovation and aggressively reduce costs will drive greater revenue and profit growth. In addition, we welcome the comprehensive review of PepsiCo's North America supply chain and go-to-market systems, as well as PepsiCo's commitment to Board refreshment. We are confident that PepsiCo will create substantial value for shareholders as it executes on this plan, and we look forward to continued engagement with the Company."

Accelerating organic revenue growth and improving core operating margin expansion are critical to enhancing long-term shareholder value. To achieve these objectives, we are acting with a high sense of urgency to improve the marketplace competitiveness and financial performance of PepsiCo Foods North America by:

- Implementing sharper everyday value through a targeted approach on affordable price tiers by brand and channel, aimed at stimulating growth and improving the purchase frequency of our mainstream brands.

- Elevating an expansive innovation agenda, with permissible and functional offerings that remove artificial colors and flavors, provide simpler ingredients, and include more protein, fiber and whole grains. This includes the recent introduction of Simply NKD Cheetos and Doritos, the restaging of Lay's and Tostitos and the 2026 launch of Doritos Protein.

- Aggressively reducing operating costs and improving operational excellence with savings generated to support meaningful investments in advertising and marketing and consumer value. For example, we have closed three manufacturing plants and shut several manufacturing lines this year and are in the process of reducing nearly 20% of SKUs in the U.S. by early next year.

The company expressed the following points: 

- Customers have expressed enthusiasm and support for our commercial plans, and we expect in-store points of presence to increase during the first half of 2026. Therefore, we expect PepsiCo Foods North America to deliver organic revenue growth and core operating margin expansion in fiscal 2026 with good progress being made towards these objectives. We also expect PepsiCo Beverages North America to build upon its business momentum and the international business to sustain its resiliency in fiscal 2026.

- As a result, we expect full-year 2026 organic revenue growth to range between 2 and 4% and expect to deliver the high end of that range during the second half of 2026. In addition, acquisitions net of divestitures that occurred in 2025 are expected to contribute 1%age point to reported net revenue growth in 2026. Based on current foreign exchange spot rates, foreign currency translation is also expected to benefit reported net revenue growth by approximately 1%age point in fiscal 2026. The ranges above imply net revenue growth within a range of 4 to 6% in fiscal 2026.

- In addition to the aggressive cost reduction actions being taken at PepsiCo Foods North America, we also intend to advance and accelerate our global productivity initiatives through more automation, digitalization and simplification initiatives. We aim to deliver a record year of productivity savings in 2026, benefiting in part from the actions taken in the second half of 2025.

- With these savings and ongoing efforts to operate more efficiently, we expect PepsiCo to deliver at least 100 basis points of core operating margin expansion in aggregate over the next three fiscal years.

- We expect the core effective annual tax rate to be approximately 22% in 2026 due to the pending impact of global minimum tax regulations (which may continue to evolve).

- Based on current foreign exchange spot rates, foreign currency translation is expected to benefit core EPS by approximately 1%age point in fiscal 2026.

- As a result of the factors mentioned above, we expect core EPS to increase approximately 5 to 7% in fiscal 2026 – or approximately 7 to 9% when excluding the impact of global minimum tax regulations. For more information, including our preliminary core constant currency EPS outlook for 2026, please refer to our "2026 Preliminary Financial Outlook" below.

- With respect to our North America supply chain and go-to-market optimization initiatives, we are carefully evaluating an integrated model and intend to take a nuanced approach factoring in key components such as return on investment, scale and market share at a U.S. state level. We intend to provide a comprehensive update on the North America Supply Chain and Go-To-Market optimization initiatives to analysts and investors in late 2026.