PEP · PepsiCo · Q3 FY2026
PepsiCo's GAAP Margin Widens as Core Profit Rises 3%
Revenue growth held near 5.6% (6.4% a quarter earlier) and GAAP operating margin widened 195 basis points to 16.9%; on PepsiCo's core basis, operating profit rose 3%.
- Published
- Oct 20, 2026
- Event
- Oct 8, 2026
- Quarter ended
- Sep 5, 2026
- Data as of
- Oct 8, 2026
Published becauseBlockhaven's first note on Q3 FY2026, whose results were filed Oct 8, 2026: the latest reported quarter showed a stronger trajectory.
The Blockhaven read
PepsiCo's GAAP figures improved sharply: operating margin widened 195 basis points to 16.9% and GAAP operating income rose 19.4% on 5.6% revenue growth. The company's own core measures moved much less, with core operating profit up 3% and core EPS up 2%, so most of the GAAP improvement reflects smaller items excluded from core results than a year earlier. A single quarter shows a direction, not yet a trend.
Latest reported quarter
12-week quarter · Earnings release filed Oct 8, 2026
RevenueGAAP
- Latest
- $25.3 billion
- Year ago
- $23.9 billion
- Change
- +5.6% (Up year over year)
Operating incomeGAAP
- Latest
- $4.26 billion
- Year ago
- $3.57 billion
- Change
- +19.4% (Up year over year)
Net incomeGAAP
- Latest
- $3.05 billion
- Year ago
- $2.6 billion
- Change
- +17.1% (Up year over year)
Diluted EPSGAAP
- Latest
- $2.23
- Year ago
- $1.90
- Change
- +17.4% (Up year over year)
Operating margin (GAAP)Derived
- Latest
- 16.9%
- Year ago
- 14.9%
- Change
- +195 bp (Up year over year)
| Measure | Basis | Latest quarter | Year ago | Change |
|---|---|---|---|---|
| Revenue | GAAP | $25.3 billion | $23.9 billion | +5.6% (Up year over year) |
| Operating income | GAAP | $4.26 billion | $3.57 billion | +19.4% (Up year over year) |
| Net income | GAAP | $3.05 billion | $2.6 billion | +17.1% (Up year over year) |
| Diluted EPS | GAAP | $2.23 | $1.90 | +17.4% (Up year over year) |
| Operating margin (GAAP) | Derived | 16.9% | 14.9% | +195 bp (Up year over year) |
Revenue growth +5.6% against +6.4% in the prior quarter (year over year, GAAP).
Trend: Improving. Operating margin widened and GAAP operating income improved; revenue growth was roughly steady.
GAAP unless labelled. Non-GAAP and company-defined measures are labelled.
What changed
- Revenue growth held near 5.6% (6.4% a quarter earlier).
- Operating margin widened 195 basis points year over year, to 16.9% from 14.9% (GAAP).
- GAAP operating income rose 19.4% year over year, with net income 17.1% and diluted EPS 17.4% moving the same way.
Why it matters
PepsiCo's own core measures, which exclude items affecting comparability, rose far less than the GAAP figures: core operating profit 3% to $4.28 billion and core EPS 2% to $2.34. Most of the GAAP gain reflects smaller excluded items than a year earlier.
Organic revenue, PepsiCo's measure of underlying sales, rose 3.1%, against 5.6% for reported net revenue.
What to watch
- Operating margin at the next report against 16.9% this quarter: a further move in the same direction would confirm this reading, and a reversal would weaken it.
- Year-over-year revenue growth against 5.6% now and 6.4% before: staying within about a point and a half would confirm the steady picture, and a larger move would change it.
Data and sources
GAAP figures come from the company's SEC filings; core (non-GAAP) and organic revenue figures come from its earnings release (Form 8-K, filed Oct 8, 2026). Each figure is labelled with its basis. Blockhaven used no outside forecasts, so no figure here is measured against market expectations.
Descriptive company facts. Not investment advice, a rating or a recommendation.