PepsiCo (PEP) Q2 2026: EPS +137%, Core Margin −40bp, PBNA Volume −4%
PepsiCo's reported earnings per share went from $0.92 to $2.18 in a single year, a 137% jump — and only a sliver of it is a genuine improvement in the operating business. The comparison base contains $1,860 million of pre-tax impairment charges taken against the Rockstar and Be & Cheery brands in Q2 2025; strip that out and the company's own core operating margin actually fell 40 basis points, to 16.8% from 17.2%. On PepsiCo's core constant currency basis — the measure that removes both the impairment base effect and the currency tailwind — earnings per share grew 1%. Revenue rose 6.4% to $24,181 million, but organic revenue grew only 2.4%, with foreign exchange and 2025 acquisitions supplying the remaining four points. For a defensive staple whose entire investment case rests on pricing power compounding quietly, the number that matters most this quarter is not the EPS headline but PepsiCo Beverages North America's 4% organic volume decline — quantified in section 2-2 below.
Sourcing note: the Form 10-Q reports GAAP figures only. Core operating profit, core margin, core EPS, core constant currency EPS and organic revenue and volume are non-GAAP measures that appear in PepsiCo's Q2 2026 earnings release (Form 8-K, Exhibit 99.1, July 9, 2026), not in the 10-Q, and are attributed to that release wherever cited below.
1. Condensed Consolidated Balance Sheet
1-1. Principal asset movements
| Item | 12/27/2025 ($M) | 6/13/2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 9,159 | 10,251 | +11.9% |
| Short-term investments | 371 | 465 | +25.3% |
| Accounts and notes receivable | 11,506 | 13,496 | +17.3% |
| Inventories | 5,845 | 6,734 | +15.2% |
| Prepaid expenses and other current assets | 1,068 | 1,829 | +71.3% |
| Property, plant and equipment, net | 29,905 | 29,771 | −0.4% |
| Amortizable intangible assets, net | 1,219 | 1,187 | −2.6% |
| Goodwill | 18,916 | 19,093 | +0.9% |
| Other indefinite-lived intangibles | 13,847 | 13,990 | +1.0% |
| Total assets | 107,399 | 112,189 | +4.5% |
Source: Form 10-Q, condensed consolidated balance sheet, 24 weeks ended June 13, 2026.
