PepsiCo warned that inflationary pressures will intensify through the rest of 2026 after a nascent sales recovery stalled in the second quarter. The company said it expects higher input‑cost inflation in the second half versus the first six months, though productivity savings and tariff refund claims should offset a good portion of the increase.

North American snack volumes were flat and organic revenue fell 2% as discounting ate into pricing. Chief executive Ramon Laguarta said consumer budgets are tightening because of rising inflationary pressures, and the recent spike in oil to $80 a barrel after renewed U.S.–Iran hostilities could keep those pressures alive longer.

Despite the domestic slowdown, PepsiCo posted a 6.4% revenue jump to $24.2bn and net income of about $3bn, both roughly in line with Wall Street estimates. Shares slipped slightly in pre‑market trading. Meanwhile Walmart announced grocery rollbacks that include several PepsiCo products.

The packaged‑food sector also faces headwinds from a consumer pushback against processed foods and the rapid adoption of GLP‑1 weight‑loss drugs. In a parallel move, Unilever is merging its food division with McCormick in a $66bn deal. PepsiCo kept its full‑year guidance, targeting 2‑4% organic revenue growth and 4‑6% EPS growth.