PepsiCo shares edged lower on Tuesday, closing down 0.3% at $165.90, as fresh economic data and a rival's earnings report highlighted persistent concerns over consumer spending.
The decline followed a U.S. retail sales report showing flat spending in December, with a core measure linked to economic growth dipping 0.1%. This signals continued pressure from price-sensitive shoppers.
In the beverage sector, Coca-Cola shares fell approximately 1.8% after the company reported fourth-quarter revenue that missed analyst expectations. The company also projected 2026 organic revenue growth of 4% to 5%, with its incoming CEO citing a need to accelerate its market response to shifting consumer trends, including low-sugar preferences and the impact of weight-loss medications.
PepsiCo has announced plans to reduce U.S. prices on key snack brands, such as Lay's and Doritos, by up to 15%. The company maintains its 2026 target for core earnings per share to increase 5% to 7%. Executives have pointed to consumer affordability as a priority, with the CEO noting a strategic focus on portion control.
Financially, PepsiCo recently initiated a new $10 billion share repurchase program, effective through February 2030. The company expects to return about $8.9 billion to shareholders in 2026, including roughly $1.0 billion in buybacks. The board also declared a quarterly dividend of $1.4225 per share and signaled another 4% increase in the annualized dividend starting in June.
Investors are now focused on potential margin pressure if the announced price cuts fail to stimulate sufficient sales volume. The company's upcoming presentation at the Consumer Analyst Group of New York conference on February 18 is seen as a key event for management to outline its pricing, packaging, and capital return strategies in more detail.
