PEPSICO INC — Call Transcript 2026

Good morning, and welcome to PepsiCo's 2026 first quarter earnings question and answer session. Your lines have been placed on listen only until it is your turn to ask a question. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin. Thank you, Kevin. Good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, April 16th, 2026, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. Please refer to our first quarter 2026 earnings release and first quarter 2026 Form 10-Q available on pepsico.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's CFO, Steve Schmitt. We ask that you please limit yourself to one question. With that, I will turn it back over to the operator for the first question. Thank you. In order to ask a question or make a comment, please press star followed by one one on your touch-tone phone at any time. If your question has been answered or you wish to remove yourself from the queue, please press star followed by one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Dara Mohsenian with Morgan Stanley. Your line is open. Hey, good morning. Hey, Dara. You guys are first up in large cap staples, so I thought it was appropriate to start with just an update on any impacts from the Iran conflict that are now contemplated in guidance and how that ties to your full year earnings visibility. First, maybe Steve, on the cost side, just can you highlight what's changed in terms of your cost assumptions, any sizable pressure points individually as you think about the cost situation, and also if you're more locked in at this point on costs with hedging and contracts or a bit more open-ended for the full year? I'm presuming costs have gone up, so what are the offsets internally as you think about 2026 earnings visibility, and do you think you still have that visibility even with the external volatility? Ramon, if I can slip a second one in, maybe you can just touch on international demand. Obviously another solid quarter, continuation of momentum there. In theory, there's also some macro risk to demand post Iran. If you can touch on the international regions, if you're seeing any impact from the conflict later in March or April so far, that'd be helpful. Again, the juxtaposition of sort of internal momentum versus the external volatility and if you think you can drive continued momentum going forward. Thanks. Hey, Dara, Steve. Thanks for the question and good morning, everyone. Obviously, we've been spending a lot of time here. A few things maybe. We've had no major issues from a supply chain standpoint. We're seeing really nice continuity there. The teams are managing it well. I think in times like these, the scale of PepsiCo is really an advantage. I really want to thank our supply chain and procurement teams for the work they're doing. I know they're working around the clock to manage this, and they're doing a really nice job making sure that we continue to service our customers. We do have some systematic hedging programs in place that does give us some near-term visibility here. We typically have about six to 12-month hedges in place. Now, our assumption is that inflation will come. The order of magnitude we're still working through, and I think a lot of that is still to be determined. The way I think about it from my experience on how you manage inflation would be kind of three ways over time. One, you grow your way through it and really leverage your infrastructure. The second is you push harder on productivity. Third, you do have options with your price pack architecture. We'd like to do the majority of it through the first two, but I think the reality is, depending on the magnitude and time, that we have inflation, we'll likely play in all three areas to combat the inflation that we'll see. From a visibility and guidance standpoint, our assumption is that we can mitigate what comes our way this year, and that's really reflected in our assumptions on guidance. As you might expect, we've started to begin our work on 2027 scenarios, but we're still working through that, and we don't have anything more to share on that today. Ramon, maybe you take the second part. Yeah. Dara Mohsenian, I would emphasize Steve's point that at this point in the plan, the scale of PepsiCo and the resilience we've built over the last few years, especially after COVID on our supply chain, we built a lot of redundancy in terms of our key materials and multiple supply points for our key materials. That's given us an advantage. Obviously, our hedge program. As Steve mentioned, the seniority and experience of our leaders on the ground make a big difference because they provide agility, they provide good common sense on how to deal with situations, protecting our people, but also driving for growth in moments of complexity. Now, with regards to the international business, as you saw, it is very strategic to our long-term growth strategy. It is one of the key pillars. It's been accelerating, and actually to your question, it continues to accelerate. We haven't seen an impact on demand since the war started. We have very strong commercial programs. Actually, I would say in some markets we're seeing a benefit because we have better supply chain than some of our competitors, especially in the food business. Nothing too remarkable at this point. We're executing our very strong commercial programs for the summer. The World Cup is a big driver of execution and innovation during the summer, and the teams are full speed executing that, along with some other transformation of the portfolio. The international business is very solid, continues to accelerate, and in our guidance, we haven't assumed any impact because we're not seeing any at this point. Thank you. One moment for our next question. Our next question comes from Andrea Teixeira with JPMorgan. Your line is open. Thank you. Good morning, everyone. I was hoping to see if you can talk about PFNA a bit more in detail, and congrats on the volume inflection. Can you talk to us about how the programs have been progressing as we go through the quarter, and how sustainable do you see this performance? Some of the investors may have asked if you had some benefit from shipping ahead of the shelf resets and then the winter storms as well. If you can comment on that and how has the repeat rates been, in your view, for the refilling of those orders. Thank you. That's good, Andrea. If you step back for a minute. Early last year, in the springtime, we defined the new strategy for the company, focus on growth and very strong productivity to fund the growth. The company has been executed across all the different sectors, this strategy with rigor and a sense of urgency, and we're seeing results in Q4 and continued sequential improvement in Q1 as you saw. Now, when you go down to the North America Foods business, this was a holistic commercial study focused on growth. There was some additional value to the consumer. There was more space. There was a restage of some of the key brands like Lay's and Tostitos. There was a lot of innovation to accelerate our, what we call permissible and functional, and there was a repurpose of funds towards Away From Home to accelerate Away From Home. All of that is delivering for us. When you see the 2% volume growth, is a combination of all these elements, more value in some of the core brands, multi-packs and multi-serve is one lever, but it's much more holistic. We feel good about where we are at this point in the journey. Still in the process of all the shelf resets and launching the innovation. I would say by the end of Q2, we'll probably be almost completed in that process. The early reads are quite exciting. Now, if you think about 2% volume growth, about 4% unit growth, we have increased 300 million occasions in Q1 in the food business, 300 million new occasions to our business compared to Q1 of last year. The Away From Home business is growing three times the average of the company. The permissible portfolio is growing double-digit in some of the brands. Clearly all the structural things that we're trying to do are working. Most importantly, and we don't talk so much about it, the productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier. Actually, the cost for Foods North America went down in Q1, which is a remarkable achievement by the team. We're good. We're feeling encouraged also by the results in the last few weeks where we got positive share, not only in volume we've had for quite some periods already, but now we have positive share in value as well, which is one of the KPIs that we set for ourselves early on. Good progress. We'll continue to update, but the execution is we're in the middle of this reset execution, but feeling very good about how the brands are reacting, how the customers are supporting, and how the teams are executing in the marketplace. Thank you. One moment for our next question. Our next question comes from Bonnie Herzog with Goldman Sachs. Your line is open. All right. Thank you. Good morning, everyone. I had a quick follow-up on PFNA. I just wanted to verify that you still expect to deliver both organic revenue growth and core operating margin expansion this year for the business. Then I do have a question, I guess, on the volume pressures you're seeing at PBNA. I assume your volumes have been pressured as you continue to roll out smaller pack sizes for affordability, and then you're leaning in on your price pack architecture initiatives. I guess hoping for some color on what's continuing to pressure volumes and maybe your strategy to drive better volume growth this year. I guess, should we assume PBNA volumes will be negative this year, but declines will moderate and improve for the next few quarters? Thanks. Thanks, Bonnie. This is Steve. Let me talk about the PFNA, I guess, margin question I think you asked. If I take a step back, if I look at the total company, core operating margin increased about 10 basis points. We did have a property sale gain from last year in the PFNA business that negatively impacted that. It would've grown, expanded a little bit more without that. We had organic revenue increase 2.6%, core EPS increased 9%, so we're pleased with how the total company performed. For PFNA specifically, we're going to continue to play offense. We're investing in value. We have exciting innovation. We're supporting that with additional advertising and marketing, and we're growing volume in sales. We affirmed our guidance today. We'll manage margin as a total company, but we want to give ourselves as much flexibility as possible within the segments to do what's necessary to hit our guidance overall. Yeah, Bonnie, on the North America beverages business, we're talking about this case pack water transition to a third party. That's still part of the numbers in Q1. I think it laps in Q4, so we only have one more month to lap. If you excluded that transition, the volume is actually almost flat. We expect that acceleration will continue in the coming periods. Now, what's exciting about PBNA at this point is that the business grew 9%. Now, it's a combination of organic growth, a revenue growth of 2%, plus 7 points of additional platforms that are now in our distribution system. Some of that is business that we acquired, like poppi. Some of that is an increased portfolio of energy brands that are generating growth to our business. We feel good about the 9%. We feel good about the acceleration, the 2% inorganic, and we feel good about the fact that we have flat volume ex case pack water, and that progress, that acceleration will continue in the coming quarters. Our expectation is to have positive volume growth ex case pack water in the coming quarters. Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open. Great. Thanks so much. I wanted to maybe get a little bit more granular, if we can, on some of the trends in the PFNA business, knowing that Nielsen scanner data doesn't capture everything. One thing that stood out to us is Lay's. Lay's is one of the businesses where I think you moved earliest. You had the great Super Bowl commercial, refreshing the visual imagery, emphasizing simple ingredients, price adjustments, and so on. That business, while it's improving, it still looked pretty weak in aggregate volumes, bumpy, but still generally down, and organic down pretty significantly. I just wanted to hear your response to that, kind of next steps. I would think that's the business that's the toughest in terms of kind of mainstream competition and less differentiation. You're the furthest along there. Just maybe your perspective, what I might be missing on how that turnaround's been progressing from your perspective. Thanks. Yeah, Lauren, this is good. The Lay's brand is part of, as I said, a more holistic restage of the full business. This is a global brand restage, so Lay's is being restaged globally. It's performing very well globally. It is performing well in the US. We grew volume this quarter in Lay's in particular. If you step back and say, okay, what's happening at PFNA? We grew volume 2%, we grew occasions units 4%, and we grew 300 million occasions in the quarter versus Q1 last year. That, for us, are some of the success metrics that we're looking at. The other set of KPIs we're looking is household penetration, and we see household penetration gains across all our core brands. On top of that, we see our permissible portfolio growing, in some cases, double digit, brands like SunChips, Smartfood, Siete, and some others. Holistically, we think we're in a very good place. The fact that we're back to gaining share in the last three weeks, we use IRI, we don't use Nielsen internally. That's the data point that we have. In IRI, we're gaining share in value terms in the last few weeks, and we've been gaining volume share now for, I think, three or four periods. Overall, we think that the consumer is backing our brands. The consumer is coming back multiple times to our brand, responding to our holistic value, plus execution, plus advertising, plus innovation strategy. There will be more as we execute the full space transformation and innovation execution. We're very optimistic about the sequential improvement of that business, and we think we're on track, actually a little bit ahead of where we thought we would be by now. Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is open. Great. Thanks. Good morning, everyone, and congrats on the progress in the quarter. I wanted to ask you both on the organic sales guidance and your expectations for the back half of the year. I think the existing commentary was that if successful with North America Foods and International continues to progress well, you could deliver toward the higher end of the 2%-4% in the back half of the year. You sounded good on International to me, maybe even a little bit better, despite the conflict. Promising with the return to volumes in North America Foods, and same with beverages. I just wanted to see if that is still the expectation, that the exit rate for the year is going to be closer to the lower end of your long-term guidance of the 4%-6%. Your comments there would be helpful. Thank you very much. Sure. Hey, Kevin, this is Steve. Maybe I'll start. Really no change in the guidance from the top-line standpoint. We guided 2%-4% in the upper end of that towards the back half of the year, and that is as good an estimate as we can give you at this point in time. In terms of the progress of the financial performance over the year, I think in the last call, we talked a little bit about the year being balanced between the first half and second half, and I still think that's as good an estimate as we can give you at this point in time. Yeah, Kevin. I think if you look at all the execution of the hungry and thirsty for growth strategy across the company is very positive. We see an acceleration in international, continue that. We're seeing momentum in PBNA, both organic and reported, so that is good as well. Sequential growth in PFNA, as I said, probably a little bit ahead of what we thought at this time. Nothing has changed for us to give you guys a different guidance on how we see the business evolving and where we plan to be by the end of the year. Thank you. One moment for our next question. Our next question comes from Filippo Falorni with Citi. Your line is open. Hi, good morning, everyone. I wanted to ask a follow-up on PFNA, especially on the innovation and the distribution gains that you're expecting. Ramon, you mentioned you should be mostly done by the end of Q2. How should we think about the relative size of distribution gains and the contribution from innovation in Q2 versus Q1? You have a lot of products shipping in Q2, like the Doritos Protein, Good Warrior, Smartfood with fiber. I'm just curious, your plans into Q2 in terms of innovation contribution and then the distribution gain. Should we see an acceleration into late April and May? If you can comment on that, it would be great. Thank you. Yeah, Filippo. I think we are, obviously, different launches, different stages of ACV that we have. If you think about the majority of our innovation is let's say 40%-50% ACV at this point. We should expect that we accelerate that in the balance of the quarter and into the summer. The same with the planograms resets. We're probably 50%, more or less, in the process of transformation of the space for the year. The space gains that we are getting from our retail partners are pretty much as we expected. Some customers a bit more, some customers a bit less, and we continue to work with them in win-win programs for the summer, where this category is very relevant to consumers. That's more or less the journey that we're in and why we think that we would be accelerating the business in the summer, I mean, towards the summer. Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandler. Your line is open. Thank you. Good morning. Can you just maybe unpack some of the top line in PFNA a little bit more and maybe elaborate on the timing of some of the price adjustments? Obviously, we see the segment price down, but just modestly in the first quarter. How much more is in place versus maybe still to come? Just on some of the category assumptions looking ahead, some of the SNAP revisions and cuts are still quite early. Anything you're seeing or how you're factoring that into guidance and just maybe some thoughts on your expectations for GLP-1 impact. This is Steve. Maybe I'll take the SNAP question. We did have eight states. There were eight states that began restriction in the first quarter. It's mainly beverages and candy. I think it's too early to come to any definitive conclusions right now in terms of impact. It's obviously something we'll watch closely, see how customers balance SNAP funds with other discretionary income for purchases over time. I think the LRB category overall remains robust, and we'll continue to monitor it. Yeah, to complement what Steve said, on the food side, we're seeing the savory snacks category accelerating. Part of that is our efforts, obviously, to bring more consumers into the category. Our retail partners are working with us in the journey. It's a very relevant category to everybody. We're seeing that category accelerating in many parts of the world. Savory snacks is growing ahead of food. In the U.S., some weeks it's already growing ahead of food, which is a good sign, and we're gaining share of that category. Overall, we see LRB consistently growing above food and beverages, and we're seeing savory snacks continuing to accelerate and eventually stabilizing and growing ahead of food and beverages, which has been the historic norm in the past. We've always thought that as leaders of the savory snack category, one of our key objectives is to make sure that the category is healthy, and we continue to bring consumers into the category. Some of them have lapsed. They're coming back, innovating to bring more families, more consumers into the category. That's the assumption for the balance of the year. So far, it's so good. As I said, we've brought in a lot of consumption locations into the category in Q1, and we see the same trends in Q2. Thank you. One moment for our next question. Our next question comes from Robert Moskow with TD Cowen. Your line is open. Hi, thanks for the question. You talked about your market shares in PFNA. I want to know if you could talk about it in PBNA also. Is it fair to say that on a value basis, those shares are still in decline? Is that part of your strategic review? Will you be evaluating how to improve market share as well as what I think we're all focused on, the bottler network? Thanks. For sure. Obviously, market share is a key. Let's step back for a minute. PBNA is growing 9% total business. We're growing at an accelerated way, including energy. We see ourselves participating in the energy portfolio through our Celsius investment and our distribution of Celsius. That's gaining share. We see ourselves, obviously, very substantially leading the functional hydration category, and that category is accelerating. For the first time in several years, we see functional hydration, including sports and the rest of functional hydration growing ahead of LRB. That's a key objective for us as well. We see Gatorade and Propel gaining share there. We still have some work to do on accelerating the coffee business and accelerating the tea business, where we're also leaders. Some of the innovation that we have in the Starbucks portfolio is intended to do that. In CSDs, we continue to have good growth in modern soda, which is a segment that keeps accelerating. Our poppi business is starting to accelerate now in Q2. Obviously, we have opportunities with Mountain Dew that we have highlighted for quite some time. Now, some of the innovation that we've put on the market early innings, but both the Dirty Mountain Dew and Baja and Cabo, different flavors on the Mountain Dew, are starting to grow the brand, which is very encouraging for us. On the Pepsi business, we're lapping some of the events that happened last year. We continue to see no sugar Pepsi growing ahead of competitors, and we are optimizing pricing, sizing on the rest of the business to participate in a better way during the summer period. Overall business, we feel good about the 9% top-line growth and how we're participating in different segments of the category to drive the growth for PBNA. Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open. Thanks, operator, and good morning, everyone. I wanted to ask a follow-up on PFNA. You mentioned in the prepared remarks that you expect sequential improvement for the division in 2026. I just wanted to clarify if that was a broad-based comment, or should we expect organic sales to continue to show improvement relative to the 1% growth that you delivered this past quarter? I guess if it's the latter, can you maybe provide some guardrails around what to expect as we think about the balance of the year? Thanks. Yes. Our current assumptions is we continue to accelerate organic. First volume, we'll continue to grow volume, which is consumption units into the brands, consumption act. We'll continue to accelerate organic and reported revenue growth. Siete becomes organic as of next quarter, I think. Our intentions and how we're thinking about the balance of the year is growing our profit growth in North America Foods again. That's how we're thinking about the business sequentially. Now, Steve mentioned that we're going to manage the business as part of the broader portfolio. We're going to continue to be on the attack, trying to make sure that we stabilize the top line and we continue to make this category, the savory snacks category, growing ahead of foods and making this a place where both us and the retailers want to invest and continue to grow for the future. Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is open. Great. Good morning, everybody. Ramon, recognizing that it's still early in the PFNA momentum rebuild, I guess, have you seen any meaningful change at all in competitive intensity, whether pricing promotions or on-shelf behavior? I guess, given the incrementality of your building cost inflation, how do you think the food industry broadly will balance what are clear consumer affordability concerns with producer needs to offset costs? Is there a chance that could interrupt your own affordability investments? I guess conversely, are you looking at that as a potential A natural limitation on the risk of more aggressive competitive pricing response to your own actions as you build through the year. How are you thinking about those dynamics? Thank you. Yeah, I'm sure there will be, as we enter the high season for the category in the summer with all the big holidays. I'm sure there will be more competitiveness in the category. We have our plans for this. It's not only price. It's trying to provide the growth strategy for Frito-Lay is not only price. Price is one element, obviously, that is very relevant for many consumers to get back to our category. It's innovation, it's execution, it's making sure that all the elements in retail and away from home continue to be successful. Now, with regards to the productivity story that we have, I don't know if our competitors have the same productivity story, but we've been focused on reducing cost per unit and overall cost for the food business and all the North America business and across the company, actually. That has been a very successful strategy for us. We still have a lot of non-executed drivers of productivity in the coming quarters and years that would help us continue to give consumers the right value and compete, probably in a better way against the other food manufacturers. That's how we're thinking about the next innings in the journey, and we'll see how inflation behaves. As Steve said earlier, we're going to play a full portfolio and want to make sure that we win in the marketplace with PFNA whilst we continue to deliver the overall profit growth targets for the full organization. Thank you. One moment for our next question. Our next question comes from Robert Ottenstein with Evercore. Your line is open. Great. Thank you very much. Most of the focus today has been on the top line. I'm wondering if we could kind of dive into, and you just started to touch on it a little bit, the productivity programs. I think you mentioned that you're on track to having perhaps a record year on productivity. Can you talk about maybe the major buckets for productivity, what you're doing maybe differently this year than in prior years? Because you've obviously been focused on productivity for a number of years, and then how you see that productivity gain scaling up through this year and into next year. Thank you. Sure. Thanks for the question. This is Steve. Well, productivity is one of these never-ending battles that we're going to have. We are benefiting from some of the moves from last year, the reduced headcount, plant closures, reduction in SKU count. It's encouraging to see key metrics like cases per hour in our supply chain continue to improve. We've got some things that are really working in our favor that allow us to play offense as much as we have to grow volume. We're going to continue to remain very focused on customer service measures while we do this and reduce expenses. I think overall, we have more work to do on the total company cost structure. It's little things that we'll look at, like just different things in the supply chain. It's like whether overtime hours are trending the way we want, the little details of how we're operating to make sure that we get the operating metrics really in line with where we need them to be to drive the productivity overall in the company. We have good progress there. We have lots of work to do, and it's a big part of our strategy to make sure we continue to play offense. Yeah, also I would add, some of the big drivers that we've been talking about in the past, we continue to execute. Global shared services, deploying technology across the company, and AI, both in our supply chain, but also in how we do transportation and we optimize routes. You think about in many countries around the world, we're moving to digital ordering systems where we reduce the time that our salesmen spend to take an order. We're leveraging technology in a very holistic way and AI and data to drive efficiency and cost transformation, not only efficiency across the system. Both supply chain and go-to-market are two big buckets. We're also optimizing our advertising and marketing. We're getting better at the multi-year journey on return on investment on marketing and trade. Those are two big demand budgets that we're optimizing. If you think about where we are in the journey, we're in the multi-year journey, and we're executing all these strategies across all of our anchor markets, obviously including the U.S. We're testing and learning the idea of can we create more value, both growth and cost, by integrating more of the supply chain in the U.S. and we're live in some tests in Texas, and we're going to deploy that in some other states. That is another vector of cost transformation going forward that we're going to learn more in the next few quarters and update you guys later in the year, early next year. Thank you. One moment for our next question. Our next question comes from Kaumil Gajrawala with Jefferies. Your line is open. Hey, guys. Good morning. Ramon, you had mentioned the very substantial increase in the number of occasions. Can you maybe dig into that a little bit more? Who are these consumers or what are those occasions? Are they different from the core? It just sounds like it was obviously quite a success so far. I'd just like to learn more about what's behind it. Thanks. I'll give you a couple of examples, Kaumil, and so you can get a sense. Obviously, by optimizing the value in some of our multi-serve and multi-packs, both in Lay's, Doritos, Ruffles, etcetera, and also in Gatorade, we are bringing lapsed consumers into the brand. These are consumers that had left the brand, either stopped buying the category or are moving somewhere else. That is kind of growth in the core. At the same time, if you think about the consumers that are coming into the category because of innovations like Naked, or we're seeing already some in some of the innovation from Gatorade with no artificials, low sugar. We're seeing consumers that were not in the category, but because they loved our favorites, now we're offering solutions with no colors, no artificial colors, no artificial flavors, and they're coming back to the category. Two types of consumers coming into the category because both of a stronger core and also innovation that drives incrementality to the category. I think we're going to continue to play both levers. Obviously, that applies to both foods and beverages, and we will continue to do this not only in the U.S., but also in our international markets, where we're starting to deploy some of the innovation from the U.S. We're seeing also an acceleration of the category, especially developed markets in Europe. Thank you. One moment for our next question. Our last question comes from Chris Carey with Wells Fargo Securities. Your line is open. Hey, guys. Thanks. Just back to PFNA, way back to the beginning of the call on Bonnie's question, did you change your investment targets or goals for the business this year? And if so, where are you seeing greater opportunity to invest? And Ramon, you flagged the World Cup as an activation event. What does a World Cup activation look like for PepsiCo, perhaps specifically for Frito-Lay? How is it different versus past events, and are you embedding any of that uplift in your outlook? Hey, Chris it's Steve. Thanks for the question. The comments I was making earlier, I think to Bonnie's question, is that we just want to give ourselves as much flexibility as possible to manage all of the sectors and all of our businesses to hit the numbers that we've given you with our guidance. That's what I was just trying to illustrate, is that we want as much flexibility. There's a lot happening in the world that we need to manage and navigate through, and so we're going to give ourselves as much flexibility within the business to make the decisions that are right for the total company. That's great. No, listen, World Cup, obviously we're sponsors on the food side across the world, and this is obviously a very big opportunity to engage consumers. This is a real passion point for many consumers. I'm a big fan of soccer, and I see how we feel at that moment. Now, it's very holistic. If you think about innovation, we're going to have flavors from around the world being executed in every market. Obviously, there's space gains, there's activations. Most importantly, from the consumer occasions point of view, we're working on No Lay's, No Game, which is kind of an activity or a campaign that we've been executing globally for quite some time. We'll double down on that with some of our global football players. The idea is to link Lay's to the occasion of sports watching and making sure that when there is gatherings of consumers watching the game, this is activated. We're going to personalize, obviously, for different. We know more or less who supports what team, and then we're going to be able to personalize the communication to our consumers. We're going to have fan of the match. We're going to have different activations in every game, where our Lay's brand will nominate fans of the match. We're going to have Quaker participating as well in the event. As the players walk into the stadium, the little children will have Quaker brand, and that's going to be part of a re-stage of Quaker globally. Obviously we have partnerships with our retailers and quick delivery partners around the world to make sure that we capture those occasions in the moment, and consumers have the opportunity to order Lay's and to order some of our drink combinations to enjoy the game with friends. A lot of occasion development, a lot of brand awareness, a lot of personalization, and some innovation to drive excitement across the world, obviously space gains and retail partnerships. It's a very holistic activation across the world. I think especially for countries where per capita low, this is a huge idea for us to bring new consumers into the brands and also to develop frequency and some new occasions. We're excited, and we can already see some of the acceleration in some of the international markets because of this activation. Thank you very much for your questions and your support, and thank you for the confidence you've placed in us, in PepsiCo, and we look forward to further conversations in coming quarters. Thank you very much. Ladies and gentlemen, this concludes today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.

Speaker 10: Good morning, and welcome to PepsiCo's 2026 first quarter earnings question and answer session. Your lines have been placed on listen only until it is your turn to ask a question. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. Mr. Pamnani, you may begin. Good morning, and welcome to PepsiCo's 2026 first quarter earnings question and answer session. good morning and welcome to pepsico's 2026 first quarter earnings question and answer session Your lines have been placed on listen only until it is your turn to ask a question. your lines have been placed on listen only until it is your turn to ask a question Today's call is being recorded and will be archived at www.pepsico.com. today's call is being recorded and will be archived at www.pepsico.com It is now my pleasure to introduce Mr. Ravi Pamnani, Senior Vice President of Investor Relations. it is now my pleasure to introduce mr ravi pamnani senior vice president of investor relations Mr. Pamnani, you may begin. mr pamnani you may begin

Speaker 13: Thank you, Kevin. Good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, April 16th, 2026, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. Please refer to our first quarter 2026 earnings release and first quarter 2026 Form 10-Q available on pepsico.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. Thank you, Kevin. thank you kevin Good morning, everyone. good morning everyone I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. i hope everyone has had a chance this morning to review our press release and prepared remarks both of which are available on our website Before we begin, please take note of our cautionary statement. before we begin please take note of our cautionary statement We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. we may make forward-looking statements on today's call including about our business plans guidance and outlook Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, April 16th, 2026, and we are under no obligation to update. forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today april 16th 2026 and we are under no obligation to update When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. when discussing our results we refer to non-gaap measures which exclude certain items from reported results Please refer to our first quarter 2026 earnings release and first quarter 2026 Form 10-Q available on pepsico.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. please refer to our first quarter 2026 earnings release and first quarter 2026 form 10-q available on pepsico.com for definitions and reconciliations of non-gaap measures and additional information regarding our results including a discussion of factors that could cause actual results to materially differ from forward-looking statements Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's CFO, Steve Schmitt. We ask that you please limit yourself to one question. With that, I will turn it back over to the operator for the first question. Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's CFO, Steve Schmitt . joining me today are pepsico's chairman and ceo ramon laguarta and pepsico's cfo steve schmitt We ask that you please limit yourself to one question. we ask that you please limit yourself to one question With that, I will turn it back over to the operator for the first question. with that i will turn it back over to the operator for the first question

Speaker 10: Thank you. In order to ask a question or make a comment, please press star followed by one one on your touch-tone phone at any time. If your question has been answered or you wish to remove yourself from the queue, please press star followed by one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Dara Mohsenian with Morgan Stanley. Your line is open. Thank you. thank you In order to ask a question or make a comment, please press star followed by one one on your touch-tone phone at any time. in order to ask a question or make a comment please press star followed by one one on your touch-tone phone at any time If your question has been answered or you wish to remove yourself from the queue, please press star followed by one one again. if your question has been answered or you wish to remove yourself from the queue please press star followed by one one again We'll pause for a moment while we compile our Q&A roster. we'll pause for a moment while we compile our q&a roster Our first question comes from Dara Mohsenian with Morgan Stanley. our first question comes from dara mohsenian with morgan stanley Your line is open. your line is open

Speaker 4: Hey, good morning. Hey, good morning. hey good morning

Speaker 13: Hey, Dara. Hey, Dara. hey dara

Speaker 4: You guys are first up in large cap staples, so I thought it was appropriate to start with just an update on any impacts from the Iran conflict that are now contemplated in guidance and how that ties to your full year earnings visibility. First, maybe Steve, on the cost side, just can you highlight what's changed in terms of your cost assumptions, any sizable pressure points individually as you think about the cost situation, and also if you're more locked in at this point on costs with hedging and contracts or a bit more open-ended for the full year? I'm presuming costs have gone up, so what are the offsets internally as you think about 2026 earnings visibility, and do you think you still have that visibility even with the external volatility? You guys are first up in large cap staples, so I thought it was appropriate to start with just an update on any impacts from the Iran conflict that are now contemplated in guidance and how that ties to your full year earnings visibility. you guys are first up in large cap staples so i thought it was appropriate to start with just an update on any impacts from the iran conflict that are now contemplated in guidance and how that ties to your full year earnings visibility First, maybe Steve, on the cost side, just can you highlight what's changed in terms of your cost assumptions, any sizable pressure points individually as you think about the cost situation, and also if you're more locked in at this point on costs with hedging and contracts or a bit more open-ended for the full year? first maybe steve on the cost side just can you highlight what's changed in terms of your cost assumptions any sizable pressure points individually as you think about the cost situation and also if you're more locked in at this point on costs with hedging and contracts or a bit more open-ended for the full year I'm presuming costs have gone up, so what are the offsets internally as you think about 2026 earnings visibility, and do you think you still have that visibility even with the external volatility? i'm presuming costs have gone up so what are the offsets internally as you think about 2026 earnings visibility and do you think you still have that visibility even with the external volatility Ramon, if I can slip a second one in, maybe you can just touch on international demand. Obviously another solid quarter, continuation of momentum there. In theory, there's also some macro risk to demand post Iran. If you can touch on the international regions, if you're seeing any impact from the conflict later in March or April so far, that'd be helpful. Again, the juxtaposition of sort of internal momentum versus the external volatility and if you think you can drive continued momentum going forward. Thanks. Ramon, if I can slip a second one in, maybe you can just touch on international demand. ramon if i can slip a second one in maybe you can just touch on international demand Obviously another solid quarter, continuation of momentum there. obviously another solid quarter continuation of momentum there In theory, there's also some macro risk to demand post Iran. in theory there's also some macro risk to demand post iran If you can touch on the international regions, if you're seeing any impact from the conflict later in March or April so far, that'd be helpful. if you can touch on the international regions if you're seeing any impact from the conflict later in march or april so far that'd be helpful Again, the juxtaposition of sort of internal momentum versus the external volatility and if you think you can drive continued momentum going forward. again the juxtaposition of sort of internal momentum versus the external volatility and if you think you can drive continued momentum going forward Thanks. thanks

Speaker 17: Hey, Dara, Steve. Thanks for the question and good morning, everyone. Obviously, we've been spending a lot of time here. A few things maybe. We've had no major issues from a supply chain standpoint. We're seeing really nice continuity there. The teams are managing it well. I think in times like these, the scale of PepsiCo is really an advantage. I really want to thank our supply chain and procurement teams for the work they're doing. I know they're working around the clock to manage this, and they're doing a really nice job making sure that we continue to service our customers. We do have some systematic hedging programs in place that does give us some near-term visibility here. We typically have about six to 12-month hedges in place. Now, our assumption is that inflation will come. Hey, Dara, Steve. hey dara steve Thanks for the question and good morning, everyone. thanks for the question and good morning everyone Obviously, we've been spending a lot of time here. obviously we've been spending a lot of time here A few things maybe. a few things maybe We've had no major issues from a supply chain standpoint. we've had no major issues from a supply chain standpoint We're seeing really nice continuity there. we're seeing really nice continuity there The teams are managing it well. the teams are managing it well I think in times like these, the scale of PepsiCo is really an advantage. i think in times like these the scale of pepsico is really an advantage I really want to thank our supply chain and procurement teams for the work they're doing. i really want to thank our supply chain and procurement teams for the work they're doing I know they're working around the clock to manage this, and they're doing a really nice job making sure that we continue to service our customers. i know they're working around the clock to manage this and they're doing a really nice job making sure that we continue to service our customers We do have some systematic hedging programs in place that does give us some near-term visibility here. we do have some systematic hedging programs in place that does give us some near-term visibility here We typically have about six to 12-month hedges in place. we typically have about six to 12-month hedges in place Now, our assumption is that inflation will come. now our assumption is that inflation will come The order of magnitude we're still working through, and I think a lot of that is still to be determined. The way I think about it from my experience on how you manage inflation would be kind of three ways over time. One, you grow your way through it and really leverage your infrastructure. The second is you push harder on productivity. Third, you do have options with your price pack architecture. We'd like to do the majority of it through the first two, but I think the reality is, depending on the magnitude and time, that we have inflation, we'll likely play in all three areas to combat the inflation that we'll see. From a visibility and guidance standpoint, our assumption is that we can mitigate what comes our way this year, and that's really reflected in our assumptions on guidance. The order of magnitude we're still working through, and I think a lot of that is still to be determined. the order of magnitude we're still working through and i think a lot of that is still to be determined The way I think about it from my experience on how you manage inflation would be kind of three ways over time. the way i think about it from my experience on how you manage inflation would be kind of three ways over time One, you grow your way through it and really leverage your infrastructure. one you grow your way through it and really leverage your infrastructure The second is you push harder on productivity. the second is you push harder on productivity Third, you do have options with your price pack architecture. third you do have options with your price pack architecture We'd like to do the majority of it through the first two, but I think the reality is, depending on the magnitude and time, that we have inflation, we'll likely play in all three areas to combat the inflation that we'll see. we'd like to do the majority of it through the first two but i think the reality is depending on the magnitude and time that we have inflation we'll likely play in all three areas to combat the inflation that we'll see From a visibility and guidance standpoint, our assumption is that we can mitigate what comes our way this year, and that's really reflected in our assumptions on guidance. from a visibility and guidance standpoint our assumption is that we can mitigate what comes our way this year and that's really reflected in our assumptions on guidance As you might expect, we've started to begin our work on 2027 scenarios, but we're still working through that, and we don't have anything more to share on that today. Ramon, maybe you take the second part. As you might expect, we've started to begin our work on 2027 scenarios, but we're still working through that, and we don't have anything more to share on that today. as you might expect we've started to begin our work on 2027 scenarios but we're still working through that and we don't have anything more to share on that today Ramon, maybe you take the second part. ramon maybe you take the second part

Speaker 12: Yeah. Dara Mohsenian, I would emphasize Steve's point that at this point in the plan, the scale of PepsiCo and the resilience we've built over the last few years, especially after COVID on our supply chain, we built a lot of redundancy in terms of our key materials and multiple supply points for our key materials. That's given us an advantage. Obviously, our hedge program. As Steve mentioned, the seniority and experience of our leaders on the ground make a big difference because they provide agility, they provide good common sense on how to deal with situations, protecting our people, but also driving for growth in moments of complexity. Now, with regards to the international business, as you saw, it is very strategic to our long-term growth strategy. It is one of the key pillars. It's been accelerating, and actually to your question, it continues to accelerate. Yeah. yeah Dara Mohsenian, I would emphasize Steve's point that at this point in the plan, the scale of PepsiCo and the resilience we've built over the last few years, especially after COVID on our supply chain, we built a lot of redundancy in terms of our key materials and multiple supply points for our key materials. dara mohsenian i would emphasize steve's point that at this point in the plan the scale of pepsico and the resilience we've built over the last few years especially after covid on our supply chain we built a lot of redundancy in terms of our key materials and multiple supply points for our key materials That's given us an advantage. that's given us an advantage Obviously, our hedge program. obviously our hedge program As Steve mentioned, the seniority and experience of our leaders on the ground make a big difference because they provide agility, they provide good common sense on how to deal with situations, protecting our people, but also driving for growth in moments of complexity. as steve mentioned the seniority and experience of our leaders on the ground make a big difference because they provide agility they provide good common sense on how to deal with situations protecting our people but also driving for growth in moments of complexity Now, with regards to the international business, as you saw, it is very strategic to our long-term growth strategy. It is one of the key pillars. now with regards to the international business as you saw, it is very strategic to our long-term growth strategy. it is one of the key pillars It's been accelerating, and actually to your question, it continues to accelerate. it's been accelerating and actually to your question it continues to accelerate We haven't seen an impact on demand since the war started. We have very strong commercial programs. Actually, I would say in some markets we're seeing a benefit because we have better supply chain than some of our competitors, especially in the food business. Nothing too remarkable at this point. We're executing our very strong commercial programs for the summer. The World Cup is a big driver of execution and innovation during the summer, and the teams are full speed executing that, along with some other transformation of the portfolio. The international business is very solid, continues to accelerate, and in our guidance, we haven't assumed any impact because we're not seeing any at this point. We haven't seen an impact on demand since the war started. we haven't seen an impact on demand since the war started We have very strong commercial programs. we have very strong commercial programs Actually, I would say in some markets we're seeing a benefit because we have better supply chain than some of our competitors, especially in the food business. actually i would say in some markets we're seeing a benefit because we have better supply chain than some of our competitors especially in the food business Nothing too remarkable at this point. nothing too remarkable at this point We're executing our very strong commercial programs for the summer. we're executing our very strong commercial programs for the summer The World Cup is a big driver of execution and innovation during the summer, and the teams are full speed executing that, along with some other transformation of the portfolio. the world cup is a big driver of execution and innovation during the summer and the teams are full speed executing that along with some other transformation of the portfolio The international business is very solid, continues to accelerate, and in our guidance, we haven't assumed any impact because we're not seeing any at this point. the international business is very solid continues to accelerate and in our guidance we haven't assumed any impact because we're not seeing any at this point

Speaker 10: Thank you. One moment for our next question. Our next question comes from Andrea Teixeira with JPMorgan. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Andrea Teixeira with JP Morgan. our next question comes from andrea teixeira with jp morgan Your line is open. your line is open

Speaker 1: Thank you. Good morning, everyone. I was hoping to see if you can talk about PFNA a bit more in detail, and congrats on the volume inflection. Can you talk to us about how the programs have been progressing as we go through the quarter, and how sustainable do you see this performance? Some of the investors may have asked if you had some benefit from shipping ahead of the shelf resets and then the winter storms as well. If you can comment on that and how has the repeat rates been, in your view, for the refilling of those orders. Thank you. Thank you. thank you Good morning, everyone. good morning everyone I was hoping to see if you can talk about PFNA a bit more in detail, and congrats on the volume inflection. i was hoping to see if you can talk about pfna a bit more in detail and congrats on the volume inflection Can you talk to us about how the programs have been progressing as we go through the quarter, and how sustainable do you see this performance? can you talk to us about how the programs have been progressing as we go through the quarter and how sustainable do you see this performance Some of the investors may have asked if you had some benefit from shipping ahead of the shelf resets and then the winter storms as well. some of the investors may have asked if you had some benefit from shipping ahead of the shelf resets and then the winter storms as well If you can comment on that and how has the repeat rates been, in your view, for the refilling of those orders. if you can comment on that and how has the repeat rates been in your view for the refilling of those orders Thank you. thank you

Speaker 12: That's good, Andrea. If you step back for a minute. Early last year, in the springtime, we defined the new strategy for the company, focus on growth and very strong productivity to fund the growth. The company has been executed across all the different sectors, this strategy with rigor and a sense of urgency, and we're seeing results in Q4 and continued sequential improvement in Q1 as you saw. Now, when you go down to the North America Foods business, this was a holistic commercial study focused on growth. There was some additional value to the consumer. There was more space. There was a restage of some of the key brands like Lay's and Tostitos. There was a lot of innovation to accelerate our, what we call permissible and functional, and there was a repurpose of funds towards Away From Home to accelerate Away From Home. That's good, Andrea. that's good andrea If you step back for a minute. if you step back for a minute Early last year, in the springtime, we defined the new strategy for the company, focus on growth and very strong productivity to fund the growth. early last year in the springtime we defined the new strategy for the company focus on growth and very strong productivity to fund the growth The company has been executed across all the different sectors, this strategy with rigor and a sense of urgency, and we're seeing results in Q4 and continued sequential improvement in Q1 as you saw. the company has been executed across all the different sectors this strategy with rigor and a sense of urgency and we're seeing results in q4 and continued sequential improvement in q1 as you saw Now, when you go down to the North America Foods business, this was a holistic commercial study focused on growth. now when you go down to the north america foods business this was a holistic commercial study focused on growth There was some additional value to the consumer. there was some additional value to the consumer There was more space. there was more space There was a restage of some of the key brands like Lay's and Tostitos. there was a restage of some of the key brands like lay's and tostitos There was a lot of innovation to accelerate our, what we call permissible and functional, and there was a repurpose of funds towards Away From Home to accelerate Away From Home. there was a lot of innovation to accelerate our what we call permissible and functional and there was a repurpose of funds towards away from home to accelerate away from home All of that is delivering for us. When you see the 2% volume growth, is a combination of all these elements, more value in some of the core brands, multi-packs and multi-serve is one lever, but it's much more holistic. We feel good about where we are at this point in the journey. Still in the process of all the shelf resets and launching the innovation. I would say by the end of Q2, we'll probably be almost completed in that process. The early reads are quite exciting. Now, if you think about 2% volume growth, about 4% unit growth, we have increased 300 million occasions in Q1 in the food business, 300 million new occasions to our business compared to Q1 of last year. The Away From Home business is growing three times the average of the company. All of that is delivering for us. all of that is delivering for us When you see the 2% volume growth, is a combination of all these elements, more value in some of the core brands, multi-packs and multi-serve is one lever, but it's much more holistic. when you see the 2% volume growth is a combination of all these elements more value in some of the core brands multi-packs and multi-serve is one lever but it's much more holistic We feel good about where we are at this point in the journey. we feel good about where we are at this point in the journey Still in the process of all the shelf resets and launching the innovation. still in the process of all the shelf resets and launching the innovation I would say by the end of Q2, we'll probably be almost completed in that process. i would say by the end of q2 we'll probably be almost completed in that process The early reads are quite exciting. the early reads are quite exciting Now, if you think about 2% volume growth, about 4% unit growth, we have increased 300 million occasions in Q1 in the food business, 300 million new occasions to our business compared to Q1 of last year. now if you think about 2% volume growth about 4% unit growth we have increased 300 million occasions in q1 in the food business 300 million new occasions to our business compared to q1 of last year The Away From Home business is growing three times the average of the company. the away from home business is growing three times the average of the company The permissible portfolio is growing double-digit in some of the brands. Clearly all the structural things that we're trying to do are working. Most importantly, and we don't talk so much about it, the productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier. Actually, the cost for Foods North America went down in Q1, which is a remarkable achievement by the team. We're good. We're feeling encouraged also by the results in the last few weeks where we got positive share, not only in volume we've had for quite some periods already, but now we have positive share in value as well, which is one of the KPIs that we set for ourselves early on. Good progress. The permissible portfolio is growing double-digit in some of the brands. the permissible portfolio is growing double-digit in some of the brands Clearly all the structural things that we're trying to do are working. clearly all the structural things that we're trying to do are working Most importantly, and we don't talk so much about it, the productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier. most importantly and we don't talk so much about it the productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier Actually, the cost for Foods North America went down in Q1, which is a remarkable achievement by the team. actually the cost for foods north america went down in q1 which is a remarkable achievement by the team We're good. we're good We're feeling encouraged also by the results in the last few weeks where we got positive share, not only in volume we've had for quite some periods already, but now we have positive share in value as well, which is one of the KPIs that we set for ourselves early on. we're feeling encouraged also by the results in the last few weeks where we got positive share not only in volume we've had for quite some periods already but now we have positive share in value as well which is one of the kpis that we set for ourselves early on Good progress. good progress We'll continue to update, but the execution is we're in the middle of this reset execution, but feeling very good about how the brands are reacting, how the customers are supporting, and how the teams are executing in the marketplace. We'll continue to update, but the execution is we're in the middle of this reset execution, but feeling very good about how the brands are reacting, how the customers are supporting, and how the teams are executing in the marketplace. we'll continue to update but the execution is we're in the middle of this reset execution but feeling very good about how the brands are reacting how the customers are supporting and how the teams are executing in the marketplace

Speaker 10: Thank you. One moment for our next question. Our next question comes from Bonnie Herzog with Goldman Sachs. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Bonnie Herzog with Goldman Sachs. our next question comes from bonnie herzog with goldman sachs Your line is open. your line is open

Speaker 2: All right. Thank you. Good morning, everyone. I had a quick follow-up on PFNA. I just wanted to verify that you still expect to deliver both organic revenue growth and core operating margin expansion this year for the business. Then I do have a question, I guess, on the volume pressures you're seeing at PBNA. I assume your volumes have been pressured as you continue to roll out smaller pack sizes for affordability, and then you're leaning in on your price pack architecture initiatives. I guess hoping for some color on what's continuing to pressure volumes and maybe your strategy to drive better volume growth this year. I guess, should we assume PBNA volumes will be negative this year, but declines will moderate and improve for the next few quarters? Thanks. All right. all right Thank you. thank you Good morning, everyone. good morning everyone I had a quick follow-up on PFNA. i had a quick follow-up on pfna I just wanted to verify that you still expect to deliver both organic revenue growth and core operating margin expansion this year for the business. i just wanted to verify that you still expect to deliver both organic revenue growth and core operating margin expansion this year for the business Then I do have a question, I guess, on the volume pressures you're seeing at PBNA. then i do have a question i guess on the volume pressures you're seeing at pbna I assume your volumes have been pressured as you continue to roll out smaller pack sizes for affordability, and then you're leaning in on your price pack architecture initiatives. i assume your volumes have been pressured as you continue to roll out smaller pack sizes for affordability and then you're leaning in on your price pack architecture initiatives I guess hoping for some color on what's continuing to pressure volumes and maybe your strategy to drive better volume growth this year. i guess hoping for some color on what's continuing to pressure volumes and maybe your strategy to drive better volume growth this year I guess, should we assume PBNA volumes will be negative this year, but declines will moderate and improve for the next few quarters? i guess should we assume pbna volumes will be negative this year but declines will moderate and improve for the next few quarters Thanks. thanks

Speaker 17: Thanks, Bonnie. This is Steve. Let me talk about the PFNA, I guess, margin question I think you asked. If I take a step back, if I look at the total company, core operating margin increased about 10 basis points. We did have a property sale gain from last year in the PFNA business that negatively impacted that. It would've grown, expanded a little bit more without that. We had organic revenue increase 2.6%, core EPS increased 9%, so we're pleased with how the total company performed. For PFNA specifically, we're going to continue to play offense. We're investing in value. We have exciting innovation. We're supporting that with additional advertising and marketing, and we're growing volume in sales. We affirmed our guidance today. Thanks, Bonnie. thanks bonnie This is Steve. this is steve Let me talk about the PFNA, I guess, margin question I think you asked. let me talk about the pfna i guess margin question i think you asked If I take a step back, if I look at the total company, core operating margin increased about 10 basis points. if i take a step back if i look at the total company core operating margin increased about 10 basis points We did have a property sale gain from last year in the PFNA business that negatively impacted that. we did have a property sale gain from last year in the pfna business that negatively impacted that It would've grown, expanded a little bit more without that. it would've grown expanded a little bit more without that We had organic revenue increase 2.6%, core EPS increased 9%, so we're pleased with how the total company performed. we had organic revenue increase 2.6% core eps increased 9% so we're pleased with how the total company performed For PFNA specifically, we're going to continue to play offense. for pfna specifically we're going to continue to play offense We're investing in value. we're investing in value We have exciting innovation. we have exciting innovation We're supporting that with additional advertising and marketing, and we're growing volume in sales. we're supporting that with additional advertising and marketing and we're growing volume in sales We affirmed our guidance today. we affirmed our guidance today We'll manage margin as a total company, but we want to give ourselves as much flexibility as possible within the segments to do what's necessary to hit our guidance overall. We'll manage margin as a total company, but we want to give ourselves as much flexibility as possible within the segments to do what's necessary to hit our guidance overall. we'll manage margin as a total company but we want to give ourselves as much flexibility as possible within the segments to do what's necessary to hit our guidance overall

Speaker 12: Yeah, Bonnie, on the North America beverages business, we're talking about this case pack water transition to a third party. That's still part of the numbers in Q1. I think it laps in Q4, so we only have one more month to lap. If you excluded that transition, the volume is actually almost flat. We expect that acceleration will continue in the coming periods. Now, what's exciting about PBNA at this point is that the business grew 9%. Now, it's a combination of organic growth, a revenue growth of 2%, plus 7 points of additional platforms that are now in our distribution system. Some of that is business that we acquired, like poppi. Some of that is an increased portfolio of energy brands that are generating growth to our business. We feel good about the 9%. Yeah, Bonnie, on the North America beverages business, we're talking about this case pack water transition to a third party. yeah bonnie on the north america beverages business we're talking about this case pack water transition to a third party That's still part of the numbers in Q1. that's still part of the numbers in q1 I think it laps in Q4, so we only have one more month to lap. i think it laps in q4 so we only have one more month to lap If you excluded that transition, the volume is actually almost flat. if you excluded that transition the volume is actually almost flat We expect that acceleration will continue in the coming periods. we expect that acceleration will continue in the coming periods Now, what's exciting about PBNA at this point is that the business grew 9%. now what's exciting about pbna at this point is that the business grew 9% Now, it's a combination of organic growth, a revenue growth of 2%, plus 7 points of additional platforms that are now in our distribution system. now it's a combination of organic growth a revenue growth of 2% plus 7 points of additional platforms that are now in our distribution system Some of that is business that we acquired, like poppi. some of that is business that we acquired like poppi Some of that is an increased portfolio of energy brands that are generating growth to our business. some of that is an increased portfolio of energy brands that are generating growth to our business We feel good about the 9%. we feel good about the 9% We feel good about the acceleration, the 2% inorganic, and we feel good about the fact that we have flat volume ex case pack water, and that progress, that acceleration will continue in the coming quarters. Our expectation is to have positive volume growth ex case pack water in the coming quarters. We feel good about the acceleration, the 2% inorganic, and we feel good about the fact that we have flat volume ex case pack water, and that progress, that acceleration will continue in the coming quarters. we feel good about the acceleration the 2% inorganic and we feel good about the fact that we have flat volume ex case pack water and that progress that acceleration will continue in the coming quarters Our expectation is to have positive volume growth ex case pack water in the coming quarters. our expectation is to have positive volume growth ex case pack water in the coming quarters

Speaker 10: Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Lauren Lieberman with Barclays. our next question comes from lauren lieberman with barclays Your line is open. your line is open

Speaker 8: Great. Thanks so much. I wanted to maybe get a little bit more granular, if we can, on some of the trends in the PFNA business, knowing that Nielsen scanner data doesn't capture everything. One thing that stood out to us is Lay's. Lay's is one of the businesses where I think you moved earliest. You had the great Super Bowl commercial, refreshing the visual imagery, emphasizing simple ingredients, price adjustments, and so on. That business, while it's improving, it still looked pretty weak in aggregate volumes, bumpy, but still generally down, and organic down pretty significantly. I just wanted to hear your response to that, kind of next steps. I would think that's the business that's the toughest in terms of kind of mainstream competition and less differentiation. You're the furthest along there. Great. great Thanks so much. thanks so much I wanted to maybe get a little bit more granular, if we can, on some of the trends in the PFNA business, knowing that Nielsen scanner data doesn't capture everything. i wanted to maybe get a little bit more granular if we can on some of the trends in the pfna business knowing that nielsen scanner data doesn't capture everything One thing that stood out to us is Lay's. one thing that stood out to us is lay's Lay's is one of the businesses where I think you moved earliest. lay's is one of the businesses where i think you moved earliest You had the great Super Bowl commercial, refreshing the visual imagery, emphasizing simple ingredients, price adjustments, and so on. you had the great super bowl commercial refreshing the visual imagery emphasizing simple ingredients price adjustments and so on That business, while it's improving, it still looked pretty weak in aggregate volumes, bumpy, but still generally down, and organic down pretty significantly. that business while it's improving it still looked pretty weak in aggregate volumes bumpy but still generally down and organic down pretty significantly I just wanted to hear your response to that, kind of next steps. i just wanted to hear your response to that kind of next steps I would think that's the business that's the toughest in terms of kind of mainstream competition and less differentiation. i would think that's the business that's the toughest in terms of kind of mainstream competition and less differentiation You're the furthest along there. you're the furthest along there Just maybe your perspective, what I might be missing on how that turnaround's been progressing from your perspective. Thanks. Just maybe your perspective, what I might be missing on how that turnaround's been progressing from your perspective. just maybe your perspective what i might be missing on how that turnaround's been progressing from your perspective Thanks. thanks

Speaker 12: Yeah, Lauren, this is good. The Lay's brand is part of, as I said, a more holistic restage of the full business. This is a global brand restage, so Lay's is being restaged globally. It's performing very well globally. It is performing well in the US. We grew volume this quarter in Lay's in particular. If you step back and say, okay, what's happening at PFNA? We grew volume 2%, we grew occasions units 4%, and we grew 300 million occasions in the quarter versus Q1 last year. That, for us, are some of the success metrics that we're looking at. The other set of KPIs we're looking is household penetration, and we see household penetration gains across all our core brands. On top of that, we see our permissible portfolio growing, in some cases, double digit, brands like SunChips, Smartfood, Siete, and some others. Yeah, Lauren, this is good. yeah lauren this is good The Lay's brand is part of, as I said, a more holistic restage of the full business. the lay's brand is part of as i said a more holistic restage of the full business This is a global brand restage, so Lay's is being restaged globally. this is a global brand restage so lay's is being restaged globally It's performing very well globally. it's performing very well globally It is performing well in the US. it is performing well in the us We grew volume this quarter in Lay's in particular. we grew volume this quarter in lay's in particular If you step back and say, okay, what's happening at PFNA? if you step back and say okay what's happening at pfna We grew volume 2%, we grew occasions units 4%, and we grew 300 million occasions in the quarter versus Q1 last year. we grew volume 2% we grew occasions units 4% and we grew 300 million occasions in the quarter versus q1 last year That, for us, are some of the success metrics that we're looking at. that for us are some of the success metrics that we're looking at The other set of KPIs we're looking is household penetration, and we see household penetration gains across all our core brands. the other set of kpis we're looking is household penetration and we see household penetration gains across all our core brands On top of that, we see our permissible portfolio growing, in some cases, double digit, brands like SunChips, Smartfood, Siete, and some others. on top of that we see our permissible portfolio growing in some cases double digit brands like sunchips smartfood siete and some others Holistically, we think we're in a very good place. The fact that we're back to gaining share in the last three weeks, we use IRI, we don't use Nielsen internally. That's the data point that we have. In IRI, we're gaining share in value terms in the last few weeks, and we've been gaining volume share now for, I think, three or four periods. Overall, we think that the consumer is backing our brands. The consumer is coming back multiple times to our brand, responding to our holistic value, plus execution, plus advertising, plus innovation strategy. There will be more as we execute the full space transformation and innovation execution. We're very optimistic about the sequential improvement of that business, and we think we're on track, actually a little bit ahead of where we thought we would be by now. Holistically, we think we're in a very good place. holistically we think we're in a very good place The fact that we're back to gaining share in the last three weeks, we use IRI, we don't use Nielsen internally. the fact that we're back to gaining share in the last three weeks we use iri we don't use nielsen internally That's the data point that we have. that's the data point that we have In IRI, we're gaining share in value terms in the last few weeks, and we've been gaining volume share now for, I think, three or four periods. in iri we're gaining share in value terms in the last few weeks and we've been gaining volume share now for i think three or four periods Overall, we think that the consumer is backing our brands. overall we think that the consumer is backing our brands The consumer is coming back multiple times to our brand, responding to our holistic value, plus execution, plus advertising, plus innovation strategy. the consumer is coming back multiple times to our brand responding to our holistic value plus execution plus advertising plus innovation strategy There will be more as we execute the full space transformation and innovation execution. there will be more as we execute the full space transformation and innovation execution We're very optimistic about the sequential improvement of that business, and we think we're on track, actually a little bit ahead of where we thought we would be by now. we're very optimistic about the sequential improvement of that business and we think we're on track actually a little bit ahead of where we thought we would be by now

Speaker 10: Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Kevin Grundy with BNP Paribas. our next question comes from kevin grundy with bnp paribas Your line is open. your line is open

Speaker 7: Great. Thanks. Good morning, everyone, and congrats on the progress in the quarter. I wanted to ask you both on the organic sales guidance and your expectations for the back half of the year. I think the existing commentary was that if successful with North America Foods and International continues to progress well, you could deliver toward the higher end of the 2%-4% in the back half of the year. You sounded good on International to me, maybe even a little bit better, despite the conflict. Promising with the return to volumes in North America Foods, and same with beverages. I just wanted to see if that is still the expectation, that the exit rate for the year is going to be closer to the lower end of your long-term guidance of the 4%-6%. Your comments there would be helpful. Great. great Thanks. thanks Good morning, everyone, and congrats on the progress in the quarter. I wanted to ask you both on the organic sales guidance and your expectations for the back half of the year. good morning everyone and congrats on the progress in the quarter. i wanted to ask you both on the organic sales guidance and your expectations for the back half of the year I think the existing commentary was that if successful with North America Foods and International continues to progress well, you could deliver toward the higher end of the 2%-4% in the back half of the year. i think the existing commentary was that if successful with north america foods and international continues to progress well you could deliver toward the higher end of the 2%-4% in the back half of the year You sounded good on International to me, maybe even a little bit better, despite the conflict. you sounded good on international to me maybe even a little bit better despite the conflict Promising with the return to volumes in North America Foods, and same with beverages. promising with the return to volumes in north america foods and same with beverages I just wanted to see if that is still the expectation, that the exit rate for the year is going to be closer to the lower end of your long-term guidance of the 4%-6%. i just wanted to see if that is still the expectation that the exit rate for the year is going to be closer to the lower end of your long-term guidance of the 4%-6% Your comments there would be helpful. your comments there would be helpful Thank you very much. Thank you very much. thank you very much

Speaker 17: Sure. Hey, Kevin, this is Steve. Maybe I'll start. Really no change in the guidance from the top-line standpoint. We guided 2%-4% in the upper end of that towards the back half of the year, and that is as good an estimate as we can give you at this point in time. In terms of the progress of the financial performance over the year, I think in the last call, we talked a little bit about the year being balanced between the first half and second half, and I still think that's as good an estimate as we can give you at this point in time. Sure. sure Hey, Kevin, this is Steve. hey kevin this is steve Maybe I'll start. maybe i'll start Really no change in the guidance from the top-line standpoint. really no change in the guidance from the top-line standpoint We guided 2%-4% in the upper end of that towards the back half of the year, and that is as good an estimate as we can give you at this point in time. we guided 2%-4% in the upper end of that towards the back half of the year and that is as good an estimate as we can give you at this point in time In terms of the progress of the financial performance over the year, I think in the last call, we talked a little bit about the year being balanced between the first half and second half, and I still think that's as good an estimate as we can give you at this point in time. in terms of the progress of the financial performance over the year i think in the last call we talked a little bit about the year being balanced between the first half and second half and i still think that's as good an estimate as we can give you at this point in time

Speaker 12: Yeah, Kevin. I think if you look at all the execution of the hungry and thirsty for growth strategy across the company is very positive. We see an acceleration in international, continue that. We're seeing momentum in PBNA, both organic and reported, so that is good as well. Sequential growth in PFNA, as I said, probably a little bit ahead of what we thought at this time. Nothing has changed for us to give you guys a different guidance on how we see the business evolving and where we plan to be by the end of the year. Yeah, Kevin. yeah kevin I think if you look at all the execution of the hungry and thirsty for growth strategy across the company is very positive. i think if you look at all the execution of the hungry and thirsty for growth strategy across the company is very positive We see an acceleration in international, continue that. we see an acceleration in international continue that We're seeing momentum in PBNA, both organic and reported, so that is good as well. we're seeing momentum in pbna both organic and reported so that is good as well Sequential growth in PFNA, as I said, probably a little bit ahead of what we thought at this time. sequential growth in pfna as i said probably a little bit ahead of what we thought at this time Nothing has changed for us to give you guys a different guidance on how we see the business evolving and where we plan to be by the end of the year. nothing has changed for us to give you guys a different guidance on how we see the business evolving and where we plan to be by the end of the year

Speaker 10: Thank you. One moment for our next question. Our next question comes from Filippo Falorni with Citi. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Filippo Falorni with Citi. our next question comes from filippo falorni with citi Your line is open. your line is open

Speaker 5: Hi, good morning, everyone. I wanted to ask a follow-up on PFNA, especially on the innovation and the distribution gains that you're expecting. Ramon, you mentioned you should be mostly done by the end of Q2. How should we think about the relative size of distribution gains and the contribution from innovation in Q2 versus Q1? You have a lot of products shipping in Q2, like the Doritos Protein, Good Warrior, Smartfood with fiber. I'm just curious, your plans into Q2 in terms of innovation contribution and then the distribution gain. Should we see an acceleration into late April and May? If you can comment on that, it would be great. Thank you. Hi, good morning, everyone. hi good morning everyone I wanted to ask a follow-up on PFNA, especially on the innovation and the distribution gains that you're expecting. i wanted to ask a follow-up on pfna especially on the innovation and the distribution gains that you're expecting Ramon, you mentioned you should be mostly done by the end of Q2. ramon you mentioned you should be mostly done by the end of q2 How should we think about the relative size of distribution gains and the contribution from innovation in Q2 versus Q1? how should we think about the relative size of distribution gains and the contribution from innovation in q2 versus q1 You have a lot of products shipping in Q2, like the Doritos Protein, Good Warrior, Smartfood with fiber. you have a lot of products shipping in q2 like the doritos protein good warrior smartfood with fiber I'm just curious, your plans into Q2 in terms of innovation contribution and then the distribution gain. i'm just curious your plans into q2 in terms of innovation contribution and then the distribution gain Should we see an acceleration into late April and May? should we see an acceleration into late april and may If you can comment on that, it would be great. if you can comment on that it would be great Thank you. thank you

Speaker 12: Yeah, Filippo. I think we are, obviously, different launches, different stages of ACV that we have. If you think about the majority of our innovation is let's say 40%-50% ACV at this point. We should expect that we accelerate that in the balance of the quarter and into the summer. The same with the planograms resets. We're probably 50%, more or less, in the process of transformation of the space for the year. The space gains that we are getting from our retail partners are pretty much as we expected. Some customers a bit more, some customers a bit less, and we continue to work with them in win-win programs for the summer, where this category is very relevant to consumers. Yeah, Filippo. yeah filippo I think we are, obviously, different launches, different stages of ACV that we have. i think we are obviously different launches different stages of acv that we have If you think about the majority of our innovation is let's say 40%-50% ACV at this point. if you think about the majority of our innovation is let's say 40%-50% acv at this point We should expect that we accelerate that in the balance of the quarter and into the summer. we should expect that we accelerate that in the balance of the quarter and into the summer The same with the planograms resets. the same with the planograms resets We're probably 50%, more or less, in the process of transformation of the space for the year. we're probably 50% more or less in the process of transformation of the space for the year The space gains that we are getting from our retail partners are pretty much as we expected. the space gains that we are getting from our retail partners are pretty much as we expected Some customers a bit more, some customers a bit less, and we continue to work with them in win-win programs for the summer, where this category is very relevant to consumers. some customers a bit more some customers a bit less and we continue to work with them in win-win programs for the summer where this category is very relevant to consumers That's more or less the journey that we're in and why we think that we would be accelerating the business in the summer, I mean, towards the summer. That's more or less the journey that we're in and why we think that we would be accelerating the business in the summer, I mean, towards the summer. that's more or less the journey that we're in and why we think that we would be accelerating the business in the summer i mean towards the summer

Speaker 10: Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandler. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Michael Lavery with Piper Sandler. our next question comes from michael lavery with piper sandler Your line is open. your line is open

Speaker 9: Thank you. Good morning. Can you just maybe unpack some of the top line in PFNA a little bit more and maybe elaborate on the timing of some of the price adjustments? Obviously, we see the segment price down, but just modestly in the first quarter. How much more is in place versus maybe still to come? Just on some of the category assumptions looking ahead, some of the SNAP revisions and cuts are still quite early. Anything you're seeing or how you're factoring that into guidance and just maybe some thoughts on your expectations for GLP-1 impact. Thank you. thank you Good morning. good morning Can you just maybe unpack some of the top line in PFNA a little bit more and maybe elaborate on the timing of some of the price adjustments? can you just maybe unpack some of the top line in pfna a little bit more and maybe elaborate on the timing of some of the price adjustments Obviously, we see the segment price down, but just modestly in the first quarter. obviously we see the segment price down but just modestly in the first quarter How much more is in place versus maybe still to come? how much more is in place versus maybe still to come Just on some of the category assumptions looking ahead, some of the SNAP revisions and cuts are still quite early. just on some of the category assumptions looking ahead some of the snap revisions and cuts are still quite early Anything you're seeing or how you're factoring that into guidance and just maybe some thoughts on your expectations for GLP-1 impact. anything you're seeing or how you're factoring that into guidance and just maybe some thoughts on your expectations for glp-1 impact

Speaker 17: This is Steve. Maybe I'll take the SNAP question. We did have eight states. There were eight states that began restriction in the first quarter. It's mainly beverages and candy. I think it's too early to come to any definitive conclusions right now in terms of impact. It's obviously something we'll watch closely, see how customers balance SNAP funds with other discretionary income for purchases over time. I think the LRB category overall remains robust, and we'll continue to monitor it. This is Steve. this is steve Maybe I'll take the SNAP question. maybe i'll take the snap question We did have eight states. we did have eight states There were eight states that began restriction in the first quarter. there were eight states that began restriction in the first quarter It's mainly beverages and candy. it's mainly beverages and candy I think it's too early to come to any definitive conclusions right now in terms of impact. i think it's too early to come to any definitive conclusions right now in terms of impact It's obviously something we'll watch closely, see how customers balance SNAP funds with other discretionary income for purchases over time. it's obviously something we'll watch closely see how customers balance snap funds with other discretionary income for purchases over time I think the LRB category overall remains robust, and we'll continue to monitor it. i think the lrb category overall remains robust and we'll continue to monitor it

Speaker 12: Yeah, to complement what Steve said, on the food side, we're seeing the savory snacks category accelerating. Part of that is our efforts, obviously, to bring more consumers into the category. Our retail partners are working with us in the journey. It's a very relevant category to everybody. We're seeing that category accelerating in many parts of the world. Savory snacks is growing ahead of food. In the U.S., some weeks it's already growing ahead of food, which is a good sign, and we're gaining share of that category. Overall, we see LRB consistently growing above food and beverages, and we're seeing savory snacks continuing to accelerate and eventually stabilizing and growing ahead of food and beverages, which has been the historic norm in the past. Yeah, to complement what Steve said, on the food side, we're seeing the savory snacks category accelerating. yeah to complement what steve said on the food side we're seeing the savory snacks category accelerating Part of that is our efforts, obviously, to bring more consumers into the category. part of that is our efforts obviously to bring more consumers into the category Our retail partners are working with us in the journey. our retail partners are working with us in the journey It's a very relevant category to everybody. it's a very relevant category to everybody We're seeing that category accelerating in many parts of the world. we're seeing that category accelerating in many parts of the world Savory snacks is growing ahead of food. savory snacks is growing ahead of food In the U.S., some weeks it's already growing ahead of food, which is a good sign, and we're gaining share of that category. in the u.s some weeks it's already growing ahead of food which is a good sign and we're gaining share of that category Overall, we see LRB consistently growing above food and beverages, and we're seeing savory snacks continuing to accelerate and eventually stabilizing and growing ahead of food and beverages, which has been the historic norm in the past. overall we see lrb consistently growing above food and beverages and we're seeing savory snacks continuing to accelerate and eventually stabilizing and growing ahead of food and beverages which has been the historic norm in the past We've always thought that as leaders of the savory snack category, one of our key objectives is to make sure that the category is healthy, and we continue to bring consumers into the category. Some of them have lapsed. They're coming back, innovating to bring more families, more consumers into the category. That's the assumption for the balance of the year. So far, it's so good. As I said, we've brought in a lot of consumption locations into the category in Q1, and we see the same trends in Q2. We've always thought that as leaders of the savory snack category, one of our key objectives is to make sure that the category is healthy, and we continue to bring consumers into the category. we've always thought that as leaders of the savory snack category one of our key objectives is to make sure that the category is healthy and we continue to bring consumers into the category Some of them have lapsed. some of them have lapsed They're coming back, innovating to bring more families, more consumers into the category. they're coming back innovating to bring more families more consumers into the category That's the assumption for the balance of the year. that's the assumption for the balance of the year So far, it's so good. so far it's so good As I said, we've brought in a lot of consumption locations into the category in Q1, and we see the same trends in Q2. as i said we've brought in a lot of consumption locations into the category in q1 and we see the same trends in q2

Speaker 10: Thank you. One moment for our next question. Our next question comes from Robert Moskow with TD Cowen. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Robert Moskow with TD Cowen. our next question comes from robert moskow with td cowen Your line is open. your line is open

Speaker 14: Hi, thanks for the question. You talked about your market shares in PFNA. I want to know if you could talk about it in PBNA also. Is it fair to say that on a value basis, those shares are still in decline? Is that part of your strategic review? Will you be evaluating how to improve market share as well as what I think we're all focused on, the bottler network? Thanks. Hi, thanks for the question. hi thanks for the question You talked about your market shares in PFNA. you talked about your market shares in pfna I want to know if you could talk about it in PBNA also. i want to know if you could talk about it in pbna also Is it fair to say that on a value basis, those shares are still in decline? is it fair to say that on a value basis those shares are still in decline Is that part of your strategic review? is that part of your strategic review Will you be evaluating how to improve market share as well as what I think we're all focused on, the bottler network? will you be evaluating how to improve market share as well as what i think we're all focused on the bottler network Thanks. thanks

Speaker 12: For sure. Obviously, market share is a key. Let's step back for a minute. PBNA is growing 9% total business. We're growing at an accelerated way, including energy. We see ourselves participating in the energy portfolio through our Celsius investment and our distribution of Celsius. That's gaining share. We see ourselves, obviously, very substantially leading the functional hydration category, and that category is accelerating. For the first time in several years, we see functional hydration, including sports and the rest of functional hydration growing ahead of LRB. That's a key objective for us as well. We see Gatorade and Propel gaining share there. We still have some work to do on accelerating the coffee business and accelerating the tea business, where we're also leaders. Some of the innovation that we have in the Starbucks portfolio is intended to do that. For sure. for sure Obviously, market share is a key. obviously market share is a key Let's step back for a minute. let's step back for a minute PBNA is growing 9% total business. pbna is growing 9% total business We're growing at an accelerated way, including energy. we're growing at an accelerated way including energy We see ourselves participating in the energy portfolio through our Celsius investment and our distribution of Celsius. we see ourselves participating in the energy portfolio through our celsius investment and our distribution of celsius That's gaining share. that's gaining share We see ourselves, obviously, very substantially leading the functional hydration category, and that category is accelerating. we see ourselves obviously very substantially leading the functional hydration category and that category is accelerating For the first time in several years, we see functional hydration, including sports and the rest of functional hydration growing ahead of LRB. for the first time in several years we see functional hydration including sports and the rest of functional hydration growing ahead of lrb That's a key objective for us as well. that's a key objective for us as well We see Gatorade and Propel gaining share there. we see gatorade and propel gaining share there We still have some work to do on accelerating the coffee business and accelerating the tea business, where we're also leaders. we still have some work to do on accelerating the coffee business and accelerating the tea business where we're also leaders Some of the innovation that we have in the Starbucks portfolio is intended to do that. some of the innovation that we have in the starbucks portfolio is intended to do that In CSDs, we continue to have good growth in modern soda, which is a segment that keeps accelerating. Our poppi business is starting to accelerate now in Q2. Obviously, we have opportunities with Mountain Dew that we have highlighted for quite some time. Now, some of the innovation that we've put on the market early innings, but both the Dirty Mountain Dew and Baja and Cabo, different flavors on the Mountain Dew, are starting to grow the brand, which is very encouraging for us. On the Pepsi business, we're lapping some of the events that happened last year. We continue to see no sugar Pepsi growing ahead of competitors, and we are optimizing pricing, sizing on the rest of the business to participate in a better way during the summer period. In CSDs, we continue to have good growth in modern soda, which is a segment that keeps accelerating. in csds we continue to have good growth in modern soda which is a segment that keeps accelerating Our poppi business is starting to accelerate now in Q2. our poppi business is starting to accelerate now in q2 Obviously, we have opportunities with Mountain Dew that we have highlighted for quite some time. obviously we have opportunities with mountain dew that we have highlighted for quite some time Now, some of the innovation that we've put on the market early innings, but both the Dirty Mountain Dew and Baja and Cabo, different flavors on the Mountain Dew, are starting to grow the brand, which is very encouraging for us. now some of the innovation that we've put on the market early innings but both the dirty mountain dew and baja and cabo different flavors on the mountain dew are starting to grow the brand which is very encouraging for us On the Pepsi business, we're lapping some of the events that happened last year. on the pepsi business we're lapping some of the events that happened last year We continue to see no sugar Pepsi growing ahead of competitors, and we are optimizing pricing, sizing on the rest of the business to participate in a better way during the summer period. we continue to see no sugar pepsi growing ahead of competitors and we are optimizing pricing sizing on the rest of the business to participate in a better way during the summer period Overall business, we feel good about the 9% top-line growth and how we're participating in different segments of the category to drive the growth for PBNA. Overall business, we feel good about the 9% top-line growth and how we're participating in different segments of the category to drive the growth for PBNA. overall business we feel good about the 9% top-line growth and how we're participating in different segments of the category to drive the growth for pbna

Speaker 10: Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Peter Grom with UBS. our next question comes from peter grom with ubs Your line is open. your line is open

Speaker 11: Thanks, operator, and good morning, everyone. I wanted to ask a follow-up on PFNA. You mentioned in the prepared remarks that you expect sequential improvement for the division in 2026. I just wanted to clarify if that was a broad-based comment, or should we expect organic sales to continue to show improvement relative to the 1% growth that you delivered this past quarter? I guess if it's the latter, can you maybe provide some guardrails around what to expect as we think about the balance of the year? Thanks. Thanks, operator, and good morning, everyone. thanks operator and good morning everyone I wanted to ask a follow-up on PFNA. i wanted to ask a follow-up on pfna You mentioned in the prepared remarks that you expect sequential improvement for the division in 2026. you mentioned in the prepared remarks that you expect sequential improvement for the division in 2026 I just wanted to clarify if that was a broad-based comment, or should we expect organic sales to continue to show improvement relative to the 1% growth that you delivered this past quarter? i just wanted to clarify if that was a broad-based comment or should we expect organic sales to continue to show improvement relative to the 1% growth that you delivered this past quarter I guess if it's the latter, can you maybe provide some guardrails around what to expect as we think about the balance of the year? i guess if it's the latter can you maybe provide some guardrails around what to expect as we think about the balance of the year Thanks. thanks

Speaker 12: Yes. Our current assumptions is we continue to accelerate organic. First volume, we'll continue to grow volume, which is consumption units into the brands, consumption act. We'll continue to accelerate organic and reported revenue growth. Siete becomes organic as of next quarter, I think. Our intentions and how we're thinking about the balance of the year is growing our profit growth in North America Foods again. That's how we're thinking about the business sequentially. Now, Steve mentioned that we're going to manage the business as part of the broader portfolio. We're going to continue to be on the attack, trying to make sure that we stabilize the top line and we continue to make this category, the savory snacks category, growing ahead of foods and making this a place where both us and the retailers want to invest and continue to grow for the future. Yes. yes Our current assumptions is we continue to accelerate organic. our current assumptions is we continue to accelerate organic First volume, we'll continue to grow volume, which is consumption units into the brands, consumption act. first volume we'll continue to grow volume which is consumption units into the brands consumption act We'll continue to accelerate organic and reported revenue growth. we'll continue to accelerate organic and reported revenue growth Siete becomes organic as of next quarter, I think. siete becomes organic as of next quarter i think Our intentions and how we're thinking about the balance of the year is growing our profit growth in North America Foods again. our intentions and how we're thinking about the balance of the year is growing our profit growth in north america foods again That's how we're thinking about the business sequentially. that's how we're thinking about the business sequentially Now, Steve mentioned that we're going to manage the business as part of the broader portfolio. now steve mentioned that we're going to manage the business as part of the broader portfolio We're going to continue to be on the attack, trying to make sure that we stabilize the top line and we continue to make this category, the savory snacks category, growing ahead of foods and making this a place where both us and the retailers want to invest and continue to grow for the future. we're going to continue to be on the attack trying to make sure that we stabilize the top line and we continue to make this category the savory snacks category growing ahead of foods and making this a place where both us and the retailers want to invest and continue to grow for the future

Speaker 10: Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Steve Powers with Deutsche Bank. our next question comes from steve powers with deutsche bank Your line is open. your line is open

Speaker 16: Great. Good morning, everybody. Ramon, recognizing that it's still early in the PFNA momentum rebuild, I guess, have you seen any meaningful change at all in competitive intensity, whether pricing promotions or on-shelf behavior? I guess, given the incrementality of your building cost inflation, how do you think the food industry broadly will balance what are clear consumer affordability concerns with producer needs to offset costs? Is there a chance that could interrupt your own affordability investments? I guess conversely, are you looking at that as a potential Great. great Good morning, everybody. good morning everybody Ramon, recognizing that it's still early in the PFNA momentum rebuild, I guess, have you seen any meaningful change at all in competitive intensity, whether pricing promotions or on-shelf behavior? ramon recognizing that it's still early in the pfna momentum rebuild i guess have you seen any meaningful change at all in competitive intensity whether pricing promotions or on-shelf behavior I guess, given the incrementality of your building cost inflation, how do you think the food industry broadly will balance what are clear consumer affordability concerns with producer needs to offset costs? i guess given the incrementality of your building cost inflation how do you think the food industry broadly will balance what are clear consumer affordability concerns with producer needs to offset costs Is there a chance that could interrupt your own affordability investments? is there a chance that could interrupt your own affordability investments I guess conversely, are you looking at that as a potential i guess conversely are you looking at that as a potential A natural limitation on the risk of more aggressive competitive pricing response to your own actions as you build through the year. How are you thinking about those dynamics? Thank you. A natural limitation on the risk of more aggressive competitive pricing response to your own actions as you build through the year. a natural limitation on the risk of more aggressive competitive pricing response to your own actions as you build through the year How are you thinking about those dynamics? how are you thinking about those dynamics Thank you. thank you

Speaker 12: Yeah, I'm sure there will be, as we enter the high season for the category in the summer with all the big holidays. I'm sure there will be more competitiveness in the category. We have our plans for this. It's not only price. It's trying to provide the growth strategy for Frito-Lay is not only price. Price is one element, obviously, that is very relevant for many consumers to get back to our category. It's innovation, it's execution, it's making sure that all the elements in retail and away from home continue to be successful. Now, with regards to the productivity story that we have, I don't know if our competitors have the same productivity story, but we've been focused on reducing cost per unit and overall cost for the food business and all the North America business and across the company, actually. Yeah, I'm sure there will be, as we enter the high season for the category in the summer with all the big holidays. yeah i'm sure there will be as we enter the high season for the category in the summer with all the big holidays I'm sure there will be more competitiveness in the category. i'm sure there will be more competitiveness in the category We have our plans for this. we have our plans for this It's not only price. it's not only price It's trying to provide the growth strategy for Frito-Lay is not only price. it's trying to provide the growth strategy for frito-lay is not only price Price is one element, obviously, that is very relevant for many consumers to get back to our category. price is one element obviously that is very relevant for many consumers to get back to our category It's innovation, it's execution, it's making sure that all the elements in retail and away from home continue to be successful. it's innovation it's execution it's making sure that all the elements in retail and away from home continue to be successful Now, with regards to the productivity story that we have, I don't know if our competitors have the same productivity story, but we've been focused on reducing cost per unit and overall cost for the food business and all the North America business and across the company, actually. now with regards to the productivity story that we have i don't know if our competitors have the same productivity story but we've been focused on reducing cost per unit and overall cost for the food business and all the north america business and across the company actually That has been a very successful strategy for us. We still have a lot of non-executed drivers of productivity in the coming quarters and years that would help us continue to give consumers the right value and compete, probably in a better way against the other food manufacturers. That's how we're thinking about the next innings in the journey, and we'll see how inflation behaves. As Steve said earlier, we're going to play a full portfolio and want to make sure that we win in the marketplace with PFNA whilst we continue to deliver the overall profit growth targets for the full organization. That has been a very successful strategy for us. that has been a very successful strategy for us We still have a lot of non-executed drivers of productivity in the coming quarters and years that would help us continue to give consumers the right value and compete, probably in a better way against the other food manufacturers. we still have a lot of non-executed drivers of productivity in the coming quarters and years that would help us continue to give consumers the right value and compete probably in a better way against the other food manufacturers That's how we're thinking about the next innings in the journey, and we'll see how inflation behaves. that's how we're thinking about the next innings in the journey and we'll see how inflation behaves As Steve said earlier, we're going to play a full portfolio and want to make sure that we win in the marketplace with PFNA whilst we continue to deliver the overall profit growth targets for the full organization. as steve said earlier we're going to play a full portfolio and want to make sure that we win in the marketplace with pfna whilst we continue to deliver the overall profit growth targets for the full organization

Speaker 10: Thank you. One moment for our next question. Our next question comes from Robert Ottenstein with Evercore. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Robert Ottenstein with Evercore. our next question comes from robert ottenstein with evercore Your line is open. your line is open

Speaker 15: Great. Thank you very much. Most of the focus today has been on the top line. I'm wondering if we could kind of dive into, and you just started to touch on it a little bit, the productivity programs. I think you mentioned that you're on track to having perhaps a record year on productivity. Can you talk about maybe the major buckets for productivity, what you're doing maybe differently this year than in prior years? Because you've obviously been focused on productivity for a number of years, and then how you see that productivity gain scaling up through this year and into next year. Thank you. Great. great Thank you very much. thank you very much Most of the focus today has been on the top line. most of the focus today has been on the top line I'm wondering if we could kind of dive into, and you just started to touch on it a little bit, the productivity programs. i'm wondering if we could kind of dive into and you just started to touch on it a little bit the productivity programs I think you mentioned that you're on track to having perhaps a record year on productivity. i think you mentioned that you're on track to having perhaps a record year on productivity Can you talk about maybe the major buckets for productivity, what you're doing maybe differently this year than in prior years? can you talk about maybe the major buckets for productivity what you're doing maybe differently this year than in prior years Because you've obviously been focused on productivity for a number of years, and then how you see that productivity gain scaling up through this year and into next year. because you've obviously been focused on productivity for a number of years and then how you see that productivity gain scaling up through this year and into next year Thank you. thank you

Speaker 17: Sure. Thanks for the question. This is Steve. Well, productivity is one of these never-ending battles that we're going to have. We are benefiting from some of the moves from last year, the reduced headcount, plant closures, reduction in SKU count. It's encouraging to see key metrics like cases per hour in our supply chain continue to improve. We've got some things that are really working in our favor that allow us to play offense as much as we have to grow volume. We're going to continue to remain very focused on customer service measures while we do this and reduce expenses. I think overall, we have more work to do on the total company cost structure. It's little things that we'll look at, like just different things in the supply chain. Sure. sure Thanks for the question. thanks for the question This is Steve. this is steve Well, productivity is one of these never-ending battles that we're going to have. well productivity is one of these never-ending battles that we're going to have We are benefiting from some of the moves from last year, the reduced headcount, plant closures, reduction in SKU count. we are benefiting from some of the moves from last year the reduced headcount plant closures reduction in sku count It's encouraging to see key metrics like cases per hour in our supply chain continue to improve. it's encouraging to see key metrics like cases per hour in our supply chain continue to improve We've got some things that are really working in our favor that allow us to play offense as much as we have to grow volume. we've got some things that are really working in our favor that allow us to play offense as much as we have to grow volume We're going to continue to remain very focused on customer service measures while we do this and reduce expenses. we're going to continue to remain very focused on customer service measures while we do this and reduce expenses I think overall, we have more work to do on the total company cost structure. i think overall we have more work to do on the total company cost structure It's little things that we'll look at, like just different things in the supply chain. it's little things that we'll look at like just different things in the supply chain It's like whether overtime hours are trending the way we want, the little details of how we're operating to make sure that we get the operating metrics really in line with where we need them to be to drive the productivity overall in the company. We have good progress there. We have lots of work to do, and it's a big part of our strategy to make sure we continue to play offense. It's like whether overtime hours are trending the way we want, the little details of how we're operating to make sure that we get the operating metrics really in line with where we need them to be to drive the productivity overall in the company. it's like whether overtime hours are trending the way we want the little details of how we're operating to make sure that we get the operating metrics really in line with where we need them to be to drive the productivity overall in the company We have good progress there. we have good progress there We have lots of work to do, and it's a big part of our strategy to make sure we continue to play offense. we have lots of work to do and it's a big part of our strategy to make sure we continue to play offense

Speaker 12: Yeah, also I would add, some of the big drivers that we've been talking about in the past, we continue to execute. Global shared services, deploying technology across the company, and AI, both in our supply chain, but also in how we do transportation and we optimize routes. You think about in many countries around the world, we're moving to digital ordering systems where we reduce the time that our salesmen spend to take an order. We're leveraging technology in a very holistic way and AI and data to drive efficiency and cost transformation, not only efficiency across the system. Both supply chain and go-to-market are two big buckets. We're also optimizing our advertising and marketing. We're getting better at the multi-year journey on return on investment on marketing and trade. Those are two big demand budgets that we're optimizing. Yeah, also I would add, some of the big drivers that we've been talking about in the past, we continue to execute. yeah also i would add some of the big drivers that we've been talking about in the past we continue to execute Global shared services, deploying technology across the company, and AI, both in our supply chain, but also in how we do transportation and we optimize routes. global shared services deploying technology across the company and ai both in our supply chain but also in how we do transportation and we optimize routes You think about in many countries around the world, we're moving to digital ordering systems where we reduce the time that our salesmen spend to take an order. you think about in many countries around the world we're moving to digital ordering systems where we reduce the time that our salesmen spend to take an order We're leveraging technology in a very holistic way and AI and data to drive efficiency and cost transformation, not only efficiency across the system. we're leveraging technology in a very holistic way and ai and data to drive efficiency and cost transformation not only efficiency across the system Both supply chain and go-to-market are two big buckets. both supply chain and go-to-market are two big buckets We're also optimizing our advertising and marketing. we're also optimizing our advertising and marketing We're getting better at the multi-year journey on return on investment on marketing and trade. we're getting better at the multi-year journey on return on investment on marketing and trade Those are two big demand budgets that we're optimizing. those are two big demand budgets that we're optimizing If you think about where we are in the journey, we're in the multi-year journey, and we're executing all these strategies across all of our anchor markets, obviously including the U.S. We're testing and learning the idea of can we create more value, both growth and cost, by integrating more of the supply chain in the U.S. and we're live in some tests in Texas, and we're going to deploy that in some other states. That is another vector of cost transformation going forward that we're going to learn more in the next few quarters and update you guys later in the year, early next year. If you think about where we are in the journey, we're in the multi-year journey, and we're executing all these strategies across all of our anchor markets, obviously including the U.S. if you think about where we are in the journey we're in the multi-year journey and we're executing all these strategies across all of our anchor markets obviously including the u.s We're testing and learning the idea of can we create more value, both growth and cost, by integrating more of the supply chain in the U.S. and we're live in some tests in Texas, and we're going to deploy that in some other states. we're testing and learning the idea of can we create more value both growth and cost by integrating more of the supply chain in the u.s and we're live in some tests in texas and we're going to deploy that in some other states That is another vector of cost transformation going forward that we're going to learn more in the next few quarters and update you guys later in the year, early next year. that is another vector of cost transformation going forward that we're going to learn more in the next few quarters and update you guys later in the year early next year

Speaker 10: Thank you. One moment for our next question. Our next question comes from Kaumil Gajrawala with Jefferies. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our next question comes from Kaumil Gajrawala with Jefferies. our next question comes from kaumil gajrawala with jefferies Your line is open. your line is open

Speaker 6: Hey, guys. Good morning. Ramon, you had mentioned the very substantial increase in the number of occasions. Can you maybe dig into that a little bit more? Who are these consumers or what are those occasions? Are they different from the core? It just sounds like it was obviously quite a success so far. I'd just like to learn more about what's behind it. Thanks. Hey, guys. hey guys Good morning. good morning Ramon, you had mentioned the very substantial increase in the number of occasions. ramon you had mentioned the very substantial increase in the number of occasions Can you maybe dig into that a little bit more? can you maybe dig into that a little bit more Who are these consumers or what are those occasions? who are these consumers or what are those occasions Are they different from the core? are they different from the core It just sounds like it was obviously quite a success so far. it just sounds like it was obviously quite a success so far I'd just like to learn more about what's behind it. i'd just like to learn more about what's behind it Thanks. thanks

Speaker 12: I'll give you a couple of examples, Kaumil, and so you can get a sense. Obviously, by optimizing the value in some of our multi-serve and multi-packs, both in Lay's, Doritos, Ruffles, etcetera, and also in Gatorade, we are bringing lapsed consumers into the brand. These are consumers that had left the brand, either stopped buying the category or are moving somewhere else. That is kind of growth in the core. At the same time, if you think about the consumers that are coming into the category because of innovations like Naked, or we're seeing already some in some of the innovation from Gatorade with no artificials, low sugar. We're seeing consumers that were not in the category, but because they loved our favorites, now we're offering solutions with no colors, no artificial colors, no artificial flavors, and they're coming back to the category. I'll give you a couple of examples, Kaumil, and so you can get a sense. i'll give you a couple of examples, kaumil and so you can get a sense Obviously, by optimizing the value in some of our multi-serve and multi-packs, both in Lay's, Doritos, Ruffles, et cetera, and also in Gatorade, we are bringing lapsed consumers into the brand. obviously by optimizing the value in some of our multi-serve and multi-packs both in lay's doritos ruffles et cetera and also in gatorade we are bringing lapsed consumers into the brand These are consumers that had left the brand, either stopped buying the category or are moving somewhere else. these are consumers that had left the brand either stopped buying the category or are moving somewhere else That is kind of growth in the core. that is kind of growth in the core At the same time, if you think about the consumers that are coming into the category because of innovations like Naked, or we're seeing already some in some of the innovation from Gatorade with no artificials, low sugar. at the same time if you think about the consumers that are coming into the category because of innovations like naked or we're seeing already some in some of the innovation from gatorade with no artificials low sugar We're seeing consumers that were not in the category, but because they loved our favorites, now we're offering solutions with no colors, no artificial colors, no artificial flavors, and they're coming back to the category. we're seeing consumers that were not in the category but because they loved our favorites now we're offering solutions with no colors no artificial colors no artificial flavors and they're coming back to the category Two types of consumers coming into the category because both of a stronger core and also innovation that drives incrementality to the category. I think we're going to continue to play both levers. Obviously, that applies to both foods and beverages, and we will continue to do this not only in the U.S., but also in our international markets, where we're starting to deploy some of the innovation from the U.S. We're seeing also an acceleration of the category, especially developed markets in Europe. Two types of consumers coming into the category because both of a stronger core and also innovation that drives incrementality to the category. two types of consumers coming into the category because both of a stronger core and also innovation that drives incrementality to the category I think we're going to continue to play both levers. i think we're going to continue to play both levers Obviously, that applies to both foods and beverages, and we will continue to do this not only in the U.S., but also in our international markets, where we're starting to deploy some of the innovation from the U.S. obviously that applies to both foods and beverages and we will continue to do this not only in the u.s but also in our international markets where we're starting to deploy some of the innovation from the u.s We're seeing also an acceleration of the category, especially developed markets in Europe. we're seeing also an acceleration of the category especially developed markets in europe

Speaker 10: Thank you. One moment for our next question. Our last question comes from Chris Carey with Wells Fargo Securities. Your line is open. Thank you. thank you One moment for our next question. one moment for our next question Our last question comes from Chris Carey with Wells Fargo Securities. our last question comes from chris carey with wells fargo securities Your line is open. your line is open

Speaker 3: Hey, guys. Thanks. Just back to PFNA, way back to the beginning of the call on Bonnie's question, did you change your investment targets or goals for the business this year? And if so, where are you seeing greater opportunity to invest? And Ramon, you flagged the World Cup as an activation event. What does a World Cup activation look like for PepsiCo, perhaps specifically for Frito-Lay? How is it different versus past events, and are you embedding any of that uplift in your outlook? Hey, guys. hey guys Thanks. thanks Just back to PFNA, way back to the beginning of the call on Bonnie's question, did you change your investment targets or goals for the business this year? just back to pfna way back to the beginning of the call on bonnie's question did you change your investment targets or goals for the business this year And if so, where are you seeing greater opportunity to invest? and if so where are you seeing greater opportunity to invest And Ramon, you flagged the World Cup as an activation event. and ramon you flagged the world cup as an activation event What does a World Cup activation look like for PepsiCo, perhaps specifically for Frito-Lay? what does a world cup activation look like for pepsico perhaps specifically for frito-lay How is it different versus past events, and are you embedding any of that uplift in your outlook? how is it different versus past events and are you embedding any of that uplift in your outlook

Speaker 17: Hey, Chris it's Steve. Thanks for the question. The comments I was making earlier, I think to Bonnie's question, is that we just want to give ourselves as much flexibility as possible to manage all of the sectors and all of our businesses to hit the numbers that we've given you with our guidance. That's what I was just trying to illustrate, is that we want as much flexibility. There's a lot happening in the world that we need to manage and navigate through, and so we're going to give ourselves as much flexibility within the business to make the decisions that are right for the total company. Hey, Chris it's Steve. hey chris it's steve Thanks for the question. thanks for the question The comments I was making earlier, I think to Bonnie's question, is that we just want to give ourselves as much flexibility as possible to manage all of the sectors and all of our businesses to hit the numbers that we've given you with our guidance. the comments i was making earlier i think to bonnie's question is that we just want to give ourselves as much flexibility as possible to manage all of the sectors and all of our businesses to hit the numbers that we've given you with our guidance That's what I was just trying to illustrate, is that we want as much flexibility. that's what i was just trying to illustrate is that we want as much flexibility There's a lot happening in the world that we need to manage and navigate through, and so we're going to give ourselves as much flexibility within the business to make the decisions that are right for the total company. there's a lot happening in the world that we need to manage and navigate through and so we're going to give ourselves as much flexibility within the business to make the decisions that are right for the total company

Speaker 12: That's great. No, listen, World Cup, obviously we're sponsors on the food side across the world, and this is obviously a very big opportunity to engage consumers. This is a real passion point for many consumers. I'm a big fan of soccer, and I see how we feel at that moment. Now, it's very holistic. If you think about innovation, we're going to have flavors from around the world being executed in every market. Obviously, there's space gains, there's activations. Most importantly, from the consumer occasions point of view, we're working on No Lay's, No Game, which is kind of an activity or a campaign that we've been executing globally for quite some time. We'll double down on that with some of our global football players. That's great. that's great No, listen, World Cup, obviously we're sponsors on the food side across the world, and this is obviously a very big opportunity to engage consumers. no listen world cup obviously we're sponsors on the food side across the world and this is obviously a very big opportunity to engage consumers This is a real passion point for many consumers. this is a real passion point for many consumers I'm a big fan of soccer, and I see how we feel at that moment. i'm a big fan of soccer and i see how we feel at that moment Now, it's very holistic. now it's very holistic If you think about innovation, we're going to have flavors from around the world being executed in every market. if you think about innovation we're going to have flavors from around the world being executed in every market Obviously, there's space gains, there's activations. obviously there's space gains there's activations Most importantly, from the consumer occasions point of view, we're working on No Lay's, No Game, which is kind of an activity or a campaign that we've been executing globally for quite some time. most importantly from the consumer occasions point of view we're working on no lay's no game which is kind of an activity or a campaign that we've been executing globally for quite some time We'll double down on that with some of our global football players. we'll double down on that with some of our global football players The idea is to link Lay's to the occasion of sports watching and making sure that when there is gatherings of consumers watching the game, this is activated. We're going to personalize, obviously, for different. We know more or less who supports what team, and then we're going to be able to personalize the communication to our consumers. We're going to have fan of the match. We're going to have different activations in every game, where our Lay's brand will nominate fans of the match. We're going to have Quaker participating as well in the event. As the players walk into the stadium, the little children will have Quaker brand, and that's going to be part of a re-stage of Quaker globally. The idea is to link Lay's to the occasion of sports watching and making sure that when there is gatherings of consumers watching the game, this is activated. the idea is to link lay's to the occasion of sports watching and making sure that when there is gatherings of consumers watching the game this is activated We're going to personalize, obviously, for different. we're going to personalize obviously for different We know more or less who supports what team, and then we're going to be able to personalize the communication to our consumers. we know more or less who supports what team and then we're going to be able to personalize the communication to our consumers We're going to have fan of the match. we're going to have fan of the match We're going to have different activations in every game, where our Lay's brand will nominate fans of the match. we're going to have different activations in every game where our lay's brand will nominate fans of the match We're going to have Quaker participating as well in the event. we're going to have quaker participating as well in the event As the players walk into the stadium, the little children will have Quaker brand, and that's going to be part of a re-stage of Quaker globally. as the players walk into the stadium the little children will have quaker brand and that's going to be part of a re-stage of quaker globally Obviously we have partnerships with our retailers and quick delivery partners around the world to make sure that we capture those occasions in the moment, and consumers have the opportunity to order Lay's and to order some of our drink combinations to enjoy the game with friends. A lot of occasion development, a lot of brand awareness, a lot of personalization, and some innovation to drive excitement across the world, obviously space gains and retail partnerships. It's a very holistic activation across the world. I think especially for countries where per capita low, this is a huge idea for us to bring new consumers into the brands and also to develop frequency and some new occasions. We're excited, and we can already see some of the acceleration in some of the international markets because of this activation. Obviously we have partnerships with our retailers and quick delivery partners around the world to make sure that we capture those occasions in the moment, and consumers have the opportunity to order Lay's and to order some of our drink combinations to enjoy the game with friends. obviously we have partnerships with our retailers and quick delivery partners around the world to make sure that we capture those occasions in the moment and consumers have the opportunity to order lay's and to order some of our drink combinations to enjoy the game with friends A lot of occasion development, a lot of brand awareness, a lot of personalization, and some innovation to drive excitement across the world, obviously space gains and retail partnerships. a lot of occasion development a lot of brand awareness a lot of personalization and some innovation to drive excitement across the world obviously space gains and retail partnerships It's a very holistic activation across the world. it's a very holistic activation across the world I think especially for countries where per capita low, this is a huge idea for us to bring new consumers into the brands and also to develop frequency and some new occasions. i think especially for countries where per capita low this is a huge idea for us to bring new consumers into the brands and also to develop frequency and some new occasions We're excited, and we can already see some of the acceleration in some of the international markets because of this activation. we're excited and we can already see some of the acceleration in some of the international markets because of this activation Thank you very much for your questions and your support, and thank you for the confidence you've placed in us, in PepsiCo, and we look forward to further conversations in coming quarters. Thank you very much. Thank you very much for your questions and your support, and thank you for the confidence you've placed in us, in PepsiCo, and we look forward to further conversations in coming quarters. thank you very much for your questions and your support and thank you for the confidence you've placed in us in pepsico and we look forward to further conversations in coming quarters Thank you very much. thank you very much

Speaker 10: Ladies and gentlemen, this concludes today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day. Ladies and gentlemen, this concludes today's presentation. ladies and gentlemen this concludes today's presentation We thank you for your participation. we thank you for your participation You may now disconnect and have a wonderful day. you may now disconnect and have a wonderful day