01—Abstract
Summary
Summary of the 10-Q filed July 17, 2025. Cited figures are marked; the original filing is the authoritative source.
PepsiCo Inc. reported mixed financial results for the 12 weeks ended June 14, 2025.
While net revenue saw a modest 1% increase to $22.7 billiona, the company experienced a significant 56% decline in operating profit, falling to $1.8 billion. This sharp decrease in profitability was largely driven by a substantial $1.9 billion impairment charge related to the Rockstar and Be & Cheery brands. Excluding this one-time charge, operating profit showed a more moderate decline.
For the 24-week period, net revenue remained flat at $40.6 billionb, while operating profit declined 35% to $4.4 billion, also impacted by brand impairments and higher costs. The company completed significant acquisitions during the period, including Siete and poppi, which are expected to contribute to future growth. Despite the profitability challenges in the current quarter, PepsiCo continues to return capital to shareholders through dividends and share repurchases and has access to substantial credit facilities.
02—Key points
Key Highlights
- Net revenue for the 12-week period increased 1% to $22.7 billion, while the 24-week revenue remained flat at $40.6 billion.
- Operating profit for the 12-week period significantly declined by 56% to $1.8 billion, primarily due to a $1.9 billion impairment charge on the Rockstar and Be & Cheery brands.
- The company completed two key acquisitions: Siete for $1.2 billion and poppi for $1.95 billion.
- Net cash provided by operating activities decreased to $996 million for the 24-week period, down from $1.3 billion in the prior year, resulting in negative free cash flow of $342 million.
- PepsiCo continues to prioritize returning capital to shareholders, with expected total distributions of approximately $8.6 billion in 2025 through dividends and share repurchases.
- The company's international operations generated 41% of consolidated net revenue for the 24-week period, with ongoing monitoring of geopolitical and economic risks in key international markets.
- Effective net pricing was a key driver for revenue growth in several segments, partially offsetting volume declines in some areas.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Pepsico Inc kept $0.06.
- Revenue$22.73B100.0%
- Cost of revenue−$10.30B45.3%
- Gross profit$12.42B54.7%
- Operating costs−$10.63B46.8%
- Operating income$1.79B7.9%
- Interest, other & tax−$526.0M2.3%
- Net income$1.26B5.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 17, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $22.73B$22.50B | +1.0% |
| Cost of Revenue | $10.30B$9.92B | +3.9% |
| Gross Profit | $12.42B$12.58B | −1.3% |
| SG&A Expenses | $8.77B$8.53B | +2.8% |
| Operating Income | $1.79B$4.05B | −55.8% |
| Interest Expense | $260.00M$234.00M | +11.1% |
| Net Income | $1.26B$3.08B | −59.0% |
| EPS (Basic) | $0.92$2.24 | −58.9% |
| EPS (Diluted) | $0.92$2.23 | −58.7% |
| Shares Outstanding (Basic) | 1.37B1.38B | −0.3% |
| Shares Outstanding (Diluted) | 1.37B1.38B | −0.4% |
05—Questions
Frequently Asked Questions
What caused the significant drop in operating profit for the 12-week period?
The substantial decrease in operating profit for the 12 weeks ended June 14, 2025, was primarily due to a significant impairment charge of $1.9 billion related to the Rockstar and Be & Cheery brands. This non-recurring charge impacted the reported profitability for the quarter.
What are the implications of the recent acquisitions of Siete and poppi?
PepsiCo acquired Siete for $1.2 billion and poppi for $1.95 billion. These acquisitions are strategic moves aimed at expanding the company's portfolio in fast-growing food and beverage categories. While contributing to a significant outflow of cash for investing activities, they are expected to drive future revenue and market share growth.
How is PepsiCo managing its debt and capital structure?
PepsiCo has accessed capital markets by issuing new notes totaling $3.5 billion and has a strong liquidity position with significant revolving credit facilities. The company continues to return capital to shareholders through dividends and share repurchases, indicating confidence in its ongoing cash generation and financial stability. The company's total liabilities increased primarily due to higher short-term and long-term debt obligations.
What are the key risks and challenges highlighted in the report?
Key risks include volatile geopolitical conditions in international markets impacting operations and currency exchange rates, commodity price fluctuations, supply chain disruptions, potential regulatory changes and taxes on products, and ongoing shifts in the retail landscape. The company also noted the impact of foreign exchange on revenue performance in certain international markets.
06—Continue