Pepsi outlines new strategy following talks with shareholder Elliot

PepsiCo Inc on Monday announced plans to enhance shareholder value following "constructive engagement" with shareholder Elliott Investment Management.

Shares in the Harrison, New York-based food and beverage holding company were flat in extended trade on Monday. They had earlier closed up 0.4% at USD145.63 each.

"Today we are announcing our plans and initiatives that aim to accelerate organic revenue growth, deliver record productivity savings and improve core operating margin - starting in 2026," said Chair and Chief Executive Officer Ramon Laguarta. "PepsiCo Foods North America will play a critical role towards achieving these targets and we feel encouraged about the actions and initiatives we are implementing with urgency to improve both marketplace and financial performance."

Pepsi said it expects 2026 organic revenue growth at 2% to 3%, with growth in the high end of that range during the second half. Acquisitions net of divestitures that occurred in 2025 are expected to contribute one percentage point to reported net revenue growth in 2026.

Core earnings per share is expected to increase about 5% to 7% in 2026, or 7% to 9% excluding the impact of global minimum tax regulations.

Pepsi expects foreign currency translation to benefit reported net revenue growth by about one percentage point in 2026.

The preliminary guidance implies net revenue growth within a range of 4% to 6% in 2026, Pepsi said.

In North America, Pepsi will implement a targeted approach to affordable price tiers by brand and channel," remove artificial colours and flavours and use simpler ingredients where practicable, and aggressively reduce operating costs.

The company aims to deliver a record year of productivity savings in 2026, benefiting in part from actions during in the second half of 2025.

"We appreciate our collaborative engagement with PepsiCo's management team and the urgency they have demonstrated," said Marc Steinberg, partner at Elliott. "We believe the plan announced today to invest in affordability, accelerate innovation and aggressively reduce costs will drive greater revenue and profit growth. In addition, we welcome the comprehensive review of PepsiCo's North America supply chain and go-to-market systems, as well as PepsiCo’s commitment to board refreshment. We are confident that PepsiCo will create substantial value for shareholders as it executes on this plan, and we look forward to continued engagement with the company."