PepsiCo’s Q3 Revenue Hits Four-Year Low; Analysts: ‘This Is the Payback for Reckless Price Hikes!’

Dragged down by weak performance from its Frito-Lay snack division, PepsiCo reported declines in both revenue and profit for Q3—and lowered its full-year sales growth guidance. The latest earnings report shows PepsiCo’s Q3 revenue fell 0.6% year-on-year to $23.32 billion—missing the market expectation of $23.76 billion and marking its weakest quarterly performance in four years. Net income attributable to shareholders declined 5.18% year-on-year to $2.93 billion, also falling short of expectations. Adjusted EPS rose 5% year-on-year to $2.31—slightly above the consensus estimate of $2.29. Facing this bleak dual decline in revenue and profit, the company attributed the results during its earnings call primarily to reduced consumer spending and geopolitical tensions. Ramon Laguarta, CEO of PepsiCo, stated: “Category trends in North America were sluggish due to the Quaker North America product recall, and operations in certain international markets were disrupted by geopolitical developments.” Additionally, PepsiCo revised downward its full-year 2024 organic sales growth guidance, now forecasting 1–3%, below its prior target of 4%. Is the Weakest Performance in Four Years the Price of Reckless Price Hikes? A major contributor to PepsiCo’s underwhelming results is excessively aggressive pricing. According to data from the Federal Reserve Bank of St. Louis and TD Cowen, since 2020, average prices for PepsiCo’s savory snacks, carbonated beverages, and sports drinks have surged by 41%. Over the past five years, chip prices at U.S. convenience stores rose 47%, while 12-can packs of soda jumped 66%. A recent analysis by market research firm Upside found that, driven by cost concerns, consumers are making fewer trips to convenience stores—and purchasing fewer items per visit. TD Cowen analyst Robert Moskow noted that PepsiCo may soon need to offer more discounts to reverse its losses. Moskow cited an example: although Frito-Lay’s Q3 volume declined 1.5% year-on-year, concurrent promotional price cuts helped boost sales.

The Price-Hike Wave Has Arrived

According to its price-adjustment announcement, Luckin Coffee raised the prices of most core products to between ¥10.9 and ¥16.9, with some individual items increasing by 30%–60%; only a few items remain at ¥9.9 in the special-offer section. Luckin Coffee is also narrowing the scope of its ¥9.9 offerings. Currently, only around a dozen drinks—including Jasmine Latte, Matcha Velvet Latte, and Butter Americano—are eligible for the ¥9.9 price point; most other beverages are priced between ¥10.9 and ¥16. On April 3, 2026, Manner officially announced that, effective April 7, the price of its single-origin espresso (SOE) coffee would increase by ¥5 per cup across all stores nationwide. Its popular drink, the ‘Green Fairy,’ was also refreshed and similarly raised by ¥5. Following the adjustment, SOE series prices now range from ¥25 to ¥30 per cup. From overseas FMCG and food price hikes to domestic foodservice brands adjusting prices and scaling back promotions, signals of rising prices are gradually emerging across diverse consumption scenarios. 2 Though seemingly minor—just a few tenths or one or two yuan—these small changes reflect mounting cost pressures facing brands in high-frequency-consumption sectors like foodservice. The primary driver behind fast-food price increases is again raw material inflation. Packaging and fresh food ingredients top the list of cost surges, squeezing margins and forcing foodservice enterprises to offset rising costs via price hikes, menu mix optimization, and reduced promotions. In the foodservice industry, international market volatility has pushed up not only energy and fertilizer costs—but also plastic pellets and polycarbonate (PC), which are critical materials used in manufacturing tea-drink equipment, beverage cups, and takeout packaging. For consumers, what they see is the final retail price of a milk tea, a cup of coffee, or a fast-food meal. For foodservice operators, however, that price reflects an entire cost chain: raw materials, packaging, equipment, logistics, and labor. Among the most visibly affected areas in this round of price hikes is beverage packaging. On April 17, foreign media reported that global food and beverage giant PepsiCo warned that the U.S.–Iran conflict could raise its food and beverage production costs. During its analyst call, PepsiCo’s CFO stated that the company assumes inflation is imminent—and that it will likely need to implement measures to offset rising costs, including possible adjustments to its pricing structure. An industry insider in the FMCG sector noted that, over recent years, most leading domestic beverage companies have already completed packaging lightweighting initiatives and are gradually advancing localization of key raw materials—giving them stronger risk resilience than many multinationals. Most firms are currently absorbing cost pressures through internal optimization, and no widespread price hikes have been announced yet. Beyond plastic-based packaging, paper prices are also rising. Recently, multiple leading paper manufacturers announced price hikes across categories—from packaging paper and cultural paper to specialty papers—with increases ranging from several dozen to several hundred yuan per ton; some digital printing papers even rose by over ¥500 per ton. This stems from objective production-cost increases. Paper producers had previously operated at a loss, prompting them to raise prices to rebalance the market. Yet the paper packaging industry currently faces overcapacity, and export prospects remain lackluster. In other words, upstream paper producers are hiking prices to restore profitability—but midstream paper packaging firms may not easily pass these costs on to downstream customers.

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