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, surpassing Wall Street's expectations for both revenue and profit on Thursday, bolstered by steady demand for its snacks and sodas in key international markets and strength in its healthier drinks category in the United States.

The company also named Steve Schmitt as its new Chief Financial Officer (CFO), effective November. Schmitt is currently the US finance head at its biggest customer, Walmart. He succeeds Jamie Caulfield, who is retiring after more than three decades with the company and has been in the CFO role for about two years, Reuters reported.

Net revenue for the quarter reached $23.94 billion, beating analysts' average expectations of $23.83 billion, according to data compiled by LSEG. Its operating profit was down 7.8% to $3.57 billion for the quarter, which ended on September 6, 2025.

International snack sales and India's contribution

One of the key drivers of the company's performance was its international convenient foods business (snacks), which posted a 2.5% organic revenue growth in the third quarter of 2025.

This growth was driven by several markets, including India, alongside Mexico, Argentina, Colombia, Egypt, Germany, Türkiye, Australia, Pakistan, and Vietnam.

Furthermore, PepsiCo highlighted in its earnings statement that year-to-date (nine months), it held or gained savoury snack share in Brazil, Colombia, Guatemala, Puerto Rico, Poland, France, India, Australia and Thailand.

However, its International Beverages Franchise (IBF) segment, which handles bottling and distribution of PepsiCo's beverage brands outside of 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 for lagging behind main rival Coca-Cola, Reuters reported.

CEO Ramon Laguarta described the interactions with Elliott as collaborative and agreed that PepsiCo is undervalued. He noted that many of the investor's ideas have been incorporated into the company's current strategy

However, Laguarta did not give a clear answer to the activist investor's boldest idea to spin off PepsiCo's large North American bottling network to grow margins.

Focus on growth and cost-cutting

PepsiCo is actively looking for growth opportunities, stating it is evaluating acquisitions in faster-growing segments in the packaged food industry, building on recent moves like the purchase of prebiotic soda brand Poppi and raising its stake in energy drink maker Celsius.

Simultaneously, the company is focused on cutting costs. Laguarta announced plans to "aggressively reduce costs" in the US snacks category, which includes closing two plants and cutting nearly 15% of its product lines during the fourth quarter.

The company is also combating consumer pushback on price hikes by offering smaller pack sizes, a strategy that has already helped drive volume growth in some Asian markets this year.

Despite a weak consumer sentiment, Laguarta noted spurts of growth in markets like India and Middle East. He said that immigration crackdown under the Trump administration was denting demand among its Hispanic customers, Reuters reported.

While tariffs accounted for a roughly three-percentage point headwind to its core earnings in the third quarter, the company plans to return to margin growth in the North America beverages category later this year, Reuters reported, quoting company executives.