PEP 8-K: Smart Summary

PepsiCo reported fourth quarter and full-year 2025 results on February 3, 2026, covering the 16 and 52 weeks ended December 27, 2025. Fourth quarter net revenue grew 5.6% (GAAP reported) and 2.1% organically, with operating profit up 58% and diluted EPS of $1.85 (up 68%). The company affirmed its fiscal 2026 financial guidance and announced a 4% increase in its annualized dividend per share, representing the 54th consecutive annual dividend increase.

• Q4 net revenue: $29,343M vs. $27,784M prior year, up 5.6% (GAAP reported); organic revenue +2.1%
• Full-year net revenue: $93,925M vs. $91,854M prior year, up 2.3% (GAAP reported); organic revenue +1.7%
• Q4 reported operating profit: $3,557M vs. $2,250M prior year, up 58%; reported operating margin 12.1% vs. 8.1% prior year
• Full-year reported operating profit: $11,498M vs. $12,887M prior year, down 11%; reported operating margin 12.2% vs. 14.0% prior year
• Q4 reported diluted EPS: $1.85 vs. $1.11 prior year, up 68%; Core EPS: $2.26 vs. $1.96 prior year
• Full-year reported diluted EPS: $6.00 vs. $6.95 prior year, down 14%; Core EPS: $8.14 vs. $8.16 prior year
• Q4 reported gross margin: 53.2% vs. 52.6% prior year; Core gross margin: 53.6% vs. 53.7% prior year
• Full-year reported gross margin: 54.1% vs. 54.6% prior year; Core gross margin: 54.5% vs. 55.1% prior year
• Full-year net cash provided by operating activities: $12,087M vs. $12,507M prior year

• PFNA: Q4 reported net revenue $8,313M (+1.5% GAAP, -1% organic); full-year $27,528M (0% GAAP, -2% organic); Q4 operating profit -6% GAAP, -2% core constant currency; full-year operating profit -7% GAAP, -6% core constant currency
• PBNA: Q4 reported net revenue $8,198M (+4% GAAP, +2% organic); full-year $28,197M (+1.5% GAAP, +1% organic); Q4 operating profit n/m GAAP, +33% core constant currency; full-year operating profit -53% GAAP, +6% core constant currency
• IB Franchise: Q4 reported net revenue $1,579M (+3.5% GAAP, +2% organic); full-year $4,997M (+2% GAAP, +3% organic); Q4 operating profit +116% GAAP, +9% core constant currency; full-year operating profit +21% GAAP, +9% core constant currency
• EMEA: Q4 reported net revenue $6,079M (+12% GAAP, +5% organic); full-year $18,025M (+8% GAAP, +6% organic); Q4 operating profit +72% GAAP, +23% core constant currency; full-year operating profit +7% GAAP, +10% core constant currency
• LatAm Foods: Q4 reported net revenue $3,684M (+11% GAAP, +5% organic); full-year $10,549M (0% GAAP, +4.5% organic); Q4 operating profit +15% GAAP, +6% core constant currency; full-year operating profit -2% GAAP, +8% core constant currency
• Asia Pacific Foods: Q4 reported net revenue $1,490M (+5% GAAP, +4% organic); full-year $4,629M (+2% GAAP, +1.5% organic); Q4 operating profit n/m GAAP, n/m core constant currency; full-year operating profit -2% GAAP, +20% core constant currency

• Annualized dividend increased 4% to $5.92 per share from $5.69 per share, effective with the dividend expected to be paid in June 2026; represents the 54th consecutive annual dividend per share increase
• Full-year cash dividends paid: $7,638M vs. $7,229M prior year
• Full-year share repurchases: $1,000M (same as prior year $1,000M)
• New share repurchase program announced providing for repurchase of up to $10B of PepsiCo common stock through February 28, 2030
• Cash and cash equivalents at end of year: $9,159M vs. $8,505M at prior year-end
• Long-term debt obligations: $42,321M vs. $37,224M at prior year-end
• Proceeds from issuances of long-term debt: $8,189M; payments of long-term debt: $4,082M

• "PepsiCo's fourth quarter results reflected a sequential acceleration in reported and organic revenue growth, with improvements in both the North America and International businesses. Accelerated net revenue growth and strong productivity savings led to strong operating margin expansion and double-digit EPS growth in the fourth quarter," said Chairman and CEO Ramon Laguarta.
• "For fiscal 2026, we aim to accelerate growth by restaging large, global brands, introducing an expansive set of product innovation in emerging and functional spaces, and offering sharper value to address consumer affordability dynamics. We also aim to deliver a record year of productivity savings which will help fund investments to accelerate growth. As a result, we expect North America's business performance to improve and the International business to remain resilient this year. We are affirming the fiscal 2026 financial guidance provided in December and are pleased to announce a 4 percent increase in our annualized dividend per share beginning with the June 2026 payment, representing our 54th consecutive annual increase," Laguarta continued.

• Organic revenue expected to increase between 2 and 4% in fiscal 2026
• Core constant currency EPS expected to increase between 4 and 6% in fiscal 2026
• Core annual effective tax rate of approximately 22%
• Capital spending to be below 5% of net revenue
• Free cash flow conversion ratio of at least 80%
• Total cash returns to shareholders of approximately $8.9B, comprised of dividends of $7.9B and share repurchases of $1B
• Foreign exchange translation tailwind of approximately 1 percentage point expected to benefit reported net revenue and core EPS growth based on current rates
• Acquisitions net of divestitures that occurred in 2025 expected to contribute 1 percentage point to reported net revenue growth in 2026
• Implied reported net revenue growth of 4 to 6% and core EPS growth of approximately 5 to 7% (approximately 7 to 9% excluding global minimum tax regulations)