PepsiCo snack rebound stalls in Q2 2026 as gas prices crimp consumer spending

PepsiCo’s North American snack business stumbled in the second quarter of 2026, with revenue in the region falling 2% despite aggressive price cuts of up to 15% on some brands. The company blamed surging gas prices for the slowdown, noting that higher fuel costs are squeezing consumers at impulse-buy hotspots like convenience stores. CEO Ramon Laguarta told analysts on July 9 that the consumer pullback was worse than anticipated, driven primarily by gas prices above $4 per gallon amid geopolitical tensions in Iran. Shares of PepsiCo dropped as much as 5.5% in New York trading on the same day, extending a year-to-date decline of about 1% through July 8, underperforming the S&P 500’s 9.3% gain. PepsiCo, ranked No. 2 on the Transport Topics Top 100 list of North America’s largest private carriers, had shown early signs of recovery earlier in 2026 after slashing prices on medium-size bags of snacks. However, that momentum stalled in Q2. Analyst Nik Modi of RBC Capital Markets said the rebound’s pace had slowed due to persistent inflation and shifting consumer value perceptions, adding that PepsiCo may continue losing beverage market share to rivals like Coca-Cola and Keurig Dr Pepper (ranked No. 12 on the TT100). The company reaffirmed its fiscal 2026 guidance and expects lower prices to gradually support a turnaround later in the year. CFO Steve Schmitt acknowledged the softer-than-expected North American performance, predicting a more gradual improvement for the rest of 2026. Laguarta also noted that PepsiCo is fine-tuning price reductions based on regional shopping differences and has raised prices on some smaller bags while securing shelf-space agreements with retailers. The company is expanding healthier snack options with higher protein and fiber content, responding to consumer demand for less processed foods. Laguarta said these products are performing well, and multipacks of portion-controlled snacks are seeing growth in both volume and revenue. For the quarter, PepsiCo reported adjusted earnings per share of $2.20, slightly above analyst estimates.