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PepsiCo (PEP) is bubbling to a new 52-week high after reporting Q4 results this morning, while also increasing its dividend and authorizing a new $10 bln buyback program. The beverage and snack-food giant delivered a modest EPS beat, while revenue growth accelerated, increasing 5.6% yr/yr to $29.34 bln, above expectations. PEP also reaffirmed its FY26 outlook, calling for organic revenue growth of +2-4% and core EPS growth of +4-6%.

• Organic growth improved to +2.1% (from +1.3% in Q3), with volume still soft in Convenient Foods (-2% vs -1%) but a notable inflection in Beverages volume, turning positive (+1% vs -1%).
• PepsiCo Foods North America (PFNA) saw sales accelerate, up +1.5% (vs flat in Q3) and down 1% organically (vs -3% in Q3), as volume trends improved to -1% in Q4 from -4% in Q3.
• Sales also accelerated in PepsiCo Beverages North America (PBNA), up +4% (vs +2% in Q3), with organic revenue +2% (in line with Q3). However, organic volume declined -4% (vs -3%), including 2.5 pts tied to the case-pack water business transition.
• The International business remained strong, delivering above 4% organic revenue growth, with Convenient Foods and Beverages organic sales up +4.5% and +4%, respectively.
• Core operating margin improved meaningfully, up 140 bps yr/yr to 13.9%, led by strong productivity savings and operating leverage, with additional help from moderating cost pressure and mix.
• PEP is shifting toward productivity-funded growth, including supply-chain efficiencies, overhead reductions, and mix optimization, to help offset lower pricing and affordability investments while protecting margins.

Briefing.com Analyst Insight

PEP's Q4 results extend the improving cadence from Q3, with accelerating revenue growth and meaningful margin expansion. It's encouraging to see Beverages volume turn positive, though Convenient Foods volumes softened sequentially, underscoring that affordability remains a key theme. Against that backdrop, management's focus on price-pack architecture and productivity-funded investment looks well suited to support value and demand while still protecting profitability. The dividend hike and new $10 bln buyback authorization add another layer of support, reinforcing management's confidence in the outlook. With FY26 reaffirmed and a dividend hike plus new buyback authorization, investors appear encouraged by improving the improving fundamentals and a clearer plan to sustain growth as PEP leans into affordability initiatives and efficiency gains.