PepsiCo reported higher third-quarter profit on Thursday but used the same release to cut its full-year outlook, telling investors that inflation-weary American shoppers are pulling back on chips and soda just as the company's own costs keep climbing.

In a regulatory filing detailing the quarter ended September 5, PepsiCo said net revenue rose 5.6% to roughly $25.3 billion and reported earnings per share climbed 17% to $2.23, helped by prior-year comparisons and acquisitions. But the number Wall Street watches most, core (adjusted) earnings per share, grew just 2% to $2.34, and organic revenue growth of 3.1% came in below some analysts' estimates.

That underlying softness was enough to push PepsiCo to trim its 2026 guidance. The company now expects core constant-currency earnings per share to grow just 1% to 2% for the full year, down sharply from its earlier forecast of 4% to 6%. Full-year organic revenue growth was narrowed to about 3%, from a prior range of 2% to 4%.

North America remains the problem

PepsiCo's international divisions, from Latin America Foods to Asia Pacific, posted solid volume gains, but North America kept dragging. Convenient-foods volumes in snacks improved only modestly, while pricing stayed soft, and the beverage unit's growth was largely attributed to last year's acquisitions rather than organic strength. Reuters reported that cash-strapped consumers facing higher gas prices are trimming discretionary snack and drink purchases, a pressure PepsiCo said it shares with packaged-food peers including General Mills, McCormick and Conagra, all of which have flagged similar input-cost inflation this year.

CEO Ramon Laguarta framed the quarter as proof that PepsiCo's overseas scale is carrying the company while its home market needs repair.

"Additional structural cost reduction actions are being identified and will be implemented in the coming months," Laguarta said, describing plans to fund growth investments and offset rising input costs.

The company did not detail the size or scope of the new cost cuts, though it said the effective core tax rate is now expected to run closer to 21% for the year, down from an earlier 22% estimate, providing a small offset to the weaker operating outlook.

Investors shrugged off the guidance cut, at least initially. Shares were reported up about 1% in premarket trading, suggesting the headline profit growth and the prospect of fresh cost cuts outweighed the trimmed forecast for some traders. The muted reaction also reflects a stock that had already priced in a soft North American showing after a mixed second quarter earlier this year.

The bigger question for PepsiCo now is execution. Laguarta has pledged "urgency" in fixing North America, but the company has leaned on cost-cutting and acquisitions to offset volume weakness for several quarters running, and investors will be watching the next earnings call for specifics on which costs are being targeted and whether snack and soda volumes finally stabilize domestically. Fourth-quarter results, due in early 2027, will show whether the lowered bar was conservative enough — or whether North American demand keeps slipping.