Detailed narrative
Format and Q3 headline results
This was a Q&A-only session, with prepared remarks released separately. Steve Schmitt cited organic revenue acceleration to 3.1%, reported revenue north of 5%, core operating profit +3% and EPS +2%. Volume leadership was highlighted: global beverage volume +3% and food volume +1%, or +4% excluding the South Africa grains business.
Ramon Laguarta called 3.1% the fastest organic growth since Q4 FY23 and a milestone toward the long-term 4% goal.
International momentum
International organic revenue grew 8% and operating margin expanded 105 bps. Laguarta framed the strength as structural rather than weather/World Cup driven, citing broad-based gains in Europe, Middle East, Asia and Latin America and greater competitiveness in both foods and beverages. International accounts for 45% of year-to-date profit. Partnerships with beer companies (Carlsberg, ABI) add on-premise presence and execution scale.
North America Foods: price reset working on volume
Snacks volume moved from low-single-digit negative last year to low-single-digit positive this year after the price reset plus innovation. Share gains in volume have persisted for multiple quarters in Foods NA, and Snacks NA is starting to convert to value share.
Volume recovery is below initial expectations because of the challenged consumer and commercial execution. Portfolio bets include portion control (100-120 calorie packs, over $3B) and permissible products (over $3B), plus Doritos Protein.
North America Beverages: soft drinks problem
Beverage NA decelerated in Q3. Hydration (Propel) and energy (Alani Nu) are competing well, but soft drinks (Pepsi, Mountain Dew, Poppi) are not, with competitors raising investment. Actions: more brand investment, tougher execution standards with bottling partners, and cost removal in corporate, allocated and overhead lines to fund growth. A Q3 tariff-related benefit in Beverage NA will not repeat, adding underlying margin pressure.
Margin pressure and guidance revision
The Q4 EPS cut is margin-driven: input costs are rising as 6-12 month hedges roll off, and mix is a headwind, while sales expectations hold. Management declined to quantify inflation or split investment versus inflation, and gave no 2027 guide, deferring to February. Mitigants are structural cost reduction, productivity (automation, digitalization, network rationalization, asset divestments) and revenue management, with benefits from the calendar turn.
Pricing and strategic options
Management plans a mix of net revenue management (price, mix, pack) and productivity to absorb a new inflation wave from energy and agricultural prices, with pricing guardrails for next year. Asked about splits or breakups, Laguarta said the company is open to revisiting every option in go-to-market and business model, including accelerating refranchising where good partners exist.
The Texas food-and-beverage integration pilot shows positive warehouse and transportation results and will apply to parts of the country, a hybrid by geography; details at a future investor meeting. Small tuck-in M&A remains open.