Flock to reduce staff by 18% amid surveillance scrutiny
Around 270 employees will leave at the end of October through voluntary buyouts, according to a media report.
PepsiCo lowers earnings outlook as North American recovery lags
The company plans further cost reductions as weak demand and rising input costs weigh on its snacks and beverages business.
PepsiCo lowered its fiscal 2026 earnings forecast on October 8 and outlined plans for further cost reductions, saying its North American recovery was progressing more slowly than expected. The company now projects currency-adjusted core earnings per share growth of 1% to 2%, rather than the low end of its previous 4% to 6% range.
Third-quarter revenue beat market expectations. PepsiCo revised its organic revenue growth forecast for 2026 to about 3%, replacing a range of 2% to 4%. Its shares rose about 1% in early trading.
CFO Steve Schmitt said North America's core operating margin would remain under pressure during the fourth quarter. Across PepsiCo, core operating margin fell 35 basis points from a year earlier in the third quarter. The year-to-date margin was 16.5% of revenue, down 25 basis points.
North American food volumes were unchanged in the third quarter, while beverage volumes declined 2% from a year earlier. The international business continued to perform well. PepsiCo reduced prices on products including Lay's and Doritos by up to 15% in February, but subsequently said some chip prices would rise to reflect higher input costs.
CEO Ramon Laguarta said PepsiCo was identifying additional structural cost reductions for implementation in coming months. He said the savings would help finance investments intended to lift organic revenue growth and offset rising input-cost inflation.