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- **Beverage Growth**: Pepsi and away-from-home channels driving 15% YoY beverage volume growth. Food business nearing flat Q3, with last 4-week improvement.
- **Cost Efficiency**: Frito-Lay margin expansion via $100M+ fixed cost reductions. International business accretive to margins, PBNA Q4 margin recovery.
- **Innovation Pipeline**: 2026 relaunches of Lay's, Tostitos, Gatorade with clean labels. Away-from-home sales growing 3x retail, functional hydration +30% YoY.
- **Leadership Shift**: Incoming CFO Steve Reinemund to focus on capital allocation. Jamie Caulfield exits after 33 years, with legacy of cost control and M&A discipline.
- **Consumer Trends**: Global shift to clean labels, functional benefits, and affordability. PepsiCo leading with permissible snacks, protein, and hydration solutions.

**【CEO & CFO Q&A Highlights】**
- **Volume Performance**: Beverage volumes grew in Q3 due to smaller pack sizes, while food volumes were impacted by promotional strategy changes. Service levels improved to 97-98%, driving better execution and last 4-week growth in both businesses.
- **Innovation Strategy**: Relaunching core brands (Pepsi, Lay's, Tostitos, Gatorade) with clean labels and functional benefits. Away-from-home sales growing 2-3x retail, with focus on permissible snacks and hydration platforms like Propel.
- **Cost Management**: Rightsizing Frito-Lay fixed costs (manufacturing nodes, warehouses) to improve margins. Q3 tariffs impacted PBNA, but Q4 margin expansion expected. One North America pilot in Texas shows potential for cost synergies.
- **International Recovery**: Q3 weather-related softness in Latin America and India, but September saw mid-single-digit growth. Brazil and Middle East leading international recovery, with focus on clean label trends.
- **Leadership Transition**: Incoming CFO Steve Reinemund to drive financial discipline. Jamie Caulfield retiring after 33 years, with praise for his cost control and strategic contributions.

**【Strategic Initiatives】**
- **Portfolio Reshaping**: Acquisitions (Siete, poppi, Alani Nu) driving innovation. SKU rationalization reducing long-tail products for operational efficiency.
- **Functional Hydration**: Propel tablets and protein-infused beverages targeting health-conscious consumers. Gatorade relaunch emphasizing superior hydration science.
- **Protein Expansion**: Muscle Milk repositioning, Doritos protein, and new Propel GLP-1 products capturing protein trend.
- **Technology Integration**: AI and data analytics optimizing supply chain, pricing, and customer engagement for agility in fast-changing consumer landscape.

PepsiCo, Inc. (PEP) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PEP

PEP fundamentals

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