PepsiCo PEP
The world's largest snack maker plus a big drinks business, with growth now coming from abroad. The open question is whether cost cuts and new products can restart its North American snack sales. Seven questions that follow the money through the business, the price and the tape. Every number comes from SEC filings and market data, and every score from a rule printed next to it.
What this File stands on. Annual figures: FY2025 10-K (year to 2025-12-27, filed 2026-02-03). "Last 12 months" figures add the quarters through 2026-09-05 (10-Q, filed 2026-10-08). Prices to 2026-10-21. The numbers rebuild every Monday, so each new 10-Q or 10-K appears within a week of filing. The written parts (business, defences, risks, the read) are from the FY2025 10-K, and the terminal read is dated 2026-10-18.
30 cents of every revenue dollar come from Beverages North America, up 2% on the year.
What it does
Makes and sells salty snacks, drinks and breakfast foods: Lay's, Doritos, Pepsi, Gatorade and Quaker, in more than 200 countries.
How it charges
Convenient foods are about 58% of sales and beverages about 42%. In North America it owns much of its own bottling and delivers straight to the store shelf; abroad it mostly sells concentrate to bottlers.
Who buys, and why
Supermarkets, convenience stores, restaurants and bottlers. Walmart alone is about 14% of sales. Shoppers pick the brand; the store gives the shelf space to whoever sells the most.
What it is building Harvesting
It spends little on growth. The business is being run for cash, not built.
R&D is treated as an investment written off over 5 years. Capital spending up to depreciation keeps the business standing; anything above it is growth spending. A company that puts more than 10% of sales into R&D and growth capex is building; it is paying off when after-tax profit has grown by at least 12 cents for every extra dollar of capital it put in.
The share count is shrinking 0.3% a year, so each share owns a little more of the business every year.
CEO Ramon Laguarta, in the seat since 2018.
The strongest defence is scale economies. Gross margin has been steady, within 2 points over 6 periods.
A shopper can pick a different bag of chips on the next trip at no cost.
A bag of Doritos is no better because someone else bought one.
Its own trucks deliver straight to store shelves across North America, a route network few rivals can afford to copy.
Lay's, Doritos, Pepsi and Gatorade each earn shelf space on their own, though North American snack volumes have stopped growing.
Sources are rated from the annual report (notes file). The two evidence checks are computed: margins that hold and high returns on capital are what a real defence looks like in the numbers.
A reverse discounted cash flow: the growth today's price requires, set against what the business has actually delivered, and how that changes if you demand a different return.
The IVT terminal read on the weekly and daily charts: bias, money flow, strength, whether the entry window is open, and the sharp captures.
The worst fall of the last five years, the balance sheet, the pressure points and the specific conditions that would break the case.
Where the business sits on quality against price, the quality score line by line, and the conclusion.
The rest of the PEP File
Chapters 5 to 8: the growth today\'s price assumes, the full IVT terminal read with sharp captures, what would break the case, and the final read.
Where every number comes from 16 figures, each linked to its SEC filing
| Figure | Value | Period | Filing |
|---|---|---|---|
| Revenue | $93.9B | FY25 | 10-K, filed 2026-02-03Revenues |
| Gross profit | $50.9B | FY25 | 10-K, filed 2026-02-03GrossProfit |
| Cost of sales | $43.1B | FY25 | 10-K, filed 2026-02-03CostOfGoodsAndServicesSold |
| Operating income | $11.5B | FY25 | 10-K, filed 2026-02-03OperatingIncomeLoss |
| Net income | $8.2B | FY25 | 10-K, filed 2026-02-03NetIncomeLoss |
| Operating cash flow | $12.1B | FY25 | 10-K, filed 2026-02-03NetCashProvidedByUsedInOperatingActivities |
| Capital spending | $4.4B | FY25 | 10-K, filed 2026-02-03PaymentsToAcquireProductiveAssets |
| Stock-based pay | $288M | FY25 | 10-K, filed 2026-02-03ShareBasedCompensation |
| Buybacks | $1.0B | FY25 | 10-K, filed 2026-02-03PaymentsForRepurchaseOfCommonStock |
| Dividends | $7.6B | FY25 | 10-K, filed 2026-02-03PaymentsOfDividends |
| Diluted shares | 1,373M | FY25 | 10-K, filed 2026-02-03WeightedAverageNumberOfDilutedSharesOutstanding |
| Cash and investments | $10.7B | 2026-09-05 | 10-Q, filed 2026-10-08CashAndCashEquivalentsAtCarryingValue |
| Debt due within a year | $1.6B | 2026-06-13 | 10-Q, filed 2026-07-09LongTermDebtCurrent |
| Long-term debt | $42.3B | 2025-12-27 | 10-K, filed 2026-02-03LongTermDebtNoncurrent |
| Short-term borrowings | $4.8B | 2026-09-05 | 10-Q, filed 2026-10-08CommercialPaper |
| Shareholders' equity | $22.3B | 2026-09-05 | 10-Q, filed 2026-10-08StockholdersEquity |
Educational research, not investment advice and not a recommendation to buy or sell any security. Scores are mechanical and reproducible from public filings; the notes are the author's judgment. Author position in PEP: none. Sources: SEC EDGAR XBRL company facts (filings to 2026-09-05), daily prices to 2026-10-21. Past performance does not predict future returns.