PepsiCo beats Q3 earnings estimates; snack sales surge in India, Walmart’s Steve Schmitt named new CFO
PepsiCo delivered a strong third-quarter performance for 2025 on Thursday, beating Wall Street expectations for both revenue and profit. This performance was supported by stable demand for snacks and sparkling beverages in key international markets and the strengthening of the healthy drinks category in the US.
The company also appointed Steve Schmitt as its new Chief Financial Officer (CFO), effective in November. Schmitt is currently the U.S. chief financial officer of its largest customer, Walmart. He will replace Jamie Caulfield, who is retiring after more than three decades with the company and has been CFO for nearly two years. Reuters reported.
Net income for the quarter reached $23.94 billion, beating analysts’ average expectations of $23.83 billion, according to data compiled by LSEG. Operating profit decreased 7.8% to $3.57 billion in the quarter ending September 6, 2025.
International snack sales and India’s contribution
One of the key drivers of the company’s performance was its international prepared foods (snacks) business, which recorded 2.5% organic revenue growth in the third quarter of 2025.
Many markets, including Mexico, Argentina, Colombia, Egypt, Germany, Turkey, Australia, Pakistan and Vietnam, as well as India, were effective in this growth.
Additionally, PepsiCo highlighted in its earnings release that it has or gained year-to-date (nine months) salty snack share in Brazil, Colombia, Guatemala, Puerto Rico, Poland, France, India, Australia and Thailand.
However, PepsiCo’s International Beverage Franchise (IBF) segment, which handles the bottling and distribution of beverage brands outside North America, experienced a 1% decline in the September quarter.
Activist investor pressure
The quarterly results come as PepsiCo faces ongoing pressure from activist investor Elliott Management as it lags behind its main rival Coca-Cola, Reuters reported.
CEO Ramon Laguarta described interactions with Elliott as collaborative and acknowledged PepsiCo was undervalued. He noted that many of the investors’ ideas have been incorporated into the company’s current strategy.
But Laguarta hasn’t provided a clear answer to the activist investor’s boldest idea, which is to spin off PepsiCo’s massive bottling network in North America to boost profit margins.
Focus on growth and cost reduction
PepsiCo is actively seeking growth opportunities, saying it is considering acquisitions in faster-growing segments of the packaged food industry, building on recent moves such as the acquisition of prebiotic soda brand Poppi, and increasing its stake in energy drink maker Celsius.
At the same time, the company focuses on reducing costs. Laguarta announced plans to “aggressively reduce costs” in the U.S. snack category, which included closing two factories and cutting about 15% of its product lines in the fourth quarter.
The company is also combating consumer backlash against price increases by offering smaller pack sizes; this strategy has helped fuel volume growth in some Asian markets this year.
Despite weak consumer confidence, Laguarta has recorded growth spurts in markets such as India and the Middle East. He said immigration crackdowns under the Trump administration have reduced demand among his Hispanic customers. Reuters reported.
While the tariffs had a roughly three percentage point negative impact on its underlying earnings in the third quarter, the company plans to return to margin growth in its North American beverage category later this year, Reuters reported, citing company executives.
