PepsiCo, Inc.'s Pepsi (PEP.US) operating profit increased by nearly 60% in Q4, and they announced a 15% price reduction on snacks such as Lay's potato chips, as well as a $100 billion stock buyback.

Global food and beverage leader PepsiCo, Inc., the parent company of Pepsi (PEP.US), has just announced that its core data for overall revenue and profit in the fourth quarter exceeded Wall Street analysts' average expectations, mainly due to strong international market demand. What's even more significant is that PepsiCo, Inc.'s management announced a stock buyback plan worth up to $10 billion and reaffirmed a profit growth target announced in December 2025. Based in New York, PepsiCo, Inc. owns popular food and beverage brands globally such as Lay's and Gatorade. The company reported adjusted earnings per share of $2.26 under non-GAAP guidelines for the fourth quarter, slightly higher than Wall Street analysts' average expectations of around $2.23, and significantly higher than $1.96 in the same period of the previous year. In terms of total revenue and other core performance indicators, PepsiCo, Inc.'s revenue for the three months ended December 27 was approximately $29.34 billion, representing a 5.6% year-on-year growth, higher than the average Wall Street analysts' expectation of around $28.97 billion. The company's GAAP operating profit for the fourth quarter was approximately $3.57 billion, achieving a nearly 60% year-on-year growth, and GAAP net profit was approximately $2.54 billion, up about 67% year-on-year. PepsiCo, Inc. has been under pressure from activist investor Elliott Management, which owned shares in the company worth about $4 billion last year. The investment firm urged PepsiCo, Inc.'s management to reform its product portfolio and make key brands more affordable. In December, the soda and popular snack manufacturer reached an agreement with the activist investor, promising to reduce its U.S. product portfolio by 20% and lower prices on some key brands to implement the aforementioned measures. As of Monday's close, PepsiCo, Inc.'s stock price had risen 8.1% year-to-date, outperforming the S&P 500 index by about 1.9%. However, PepsiCo, Inc.'s stock price fell 5% during the U.S. stock market's ongoing bull run in 2025 and significantly lagged behind its biggest competitor, Coca-Cola Company. Demand for snacks and sodas with more local flavors in countries like India and Brazil has been driving sales growth. Meanwhile, the company is making comprehensive adjustments to its product portfolio in the U.S. to meet consumers' changing tastes. According to media reports citing company executives on Tuesday, PepsiCo, Inc. plans to reduce prices by up to 15% for products like Lay's chips and Tostitos, including Lay's chips, Doritos, Tostitos, Lay's chips, and Tostitos corn chips, while keeping the sizes unchanged due to widespread consumer complaints about high prices. PepsiCo, Inc. and other large food, beverage, and consumer goods companies focusing on consumers, such as Procter & Gamble Company and Coca-Cola Company, have shifted their focus to lower-priced entry-level products and smaller packaging sizes as more U.S. middle and low-income consumers seek more enduring budgets in the face of high inflation and challenges like delays in food stamp benefits due to the U.S. government shutdown last year. PepsiCo, Inc. CEO Ramon Laguarta said in a statement on Tuesday that the company aims to drive growth by "offering more competitive snacks and beverage products to meet changing consumer purchasing power." To meet the strong demand from consumers for cleaner and healthier ingredients, the company has invested in rebranding major products such as Lay's chips and Tostitos chips, benefiting from the widespread use of weight-loss drugs worldwide and the Trump administration's support for the "Make America Healthy Again" movement. Regarding the performance outlook that the market is focused on, PepsiCo, Inc.'s management has reiterated the company's annual core earnings per share growth target announced in December, aiming to achieve a 4% to 6% increase and reaffirming that full-year organic revenue will grow 2% to 4%.