A $9.3 billion noncash impairment charge was recorded due to a sustained decline in stock price, reducing the carrying value of intangible assets.
Emerging markets grew top line by around 8% through both price and volume, with the highest operating income margin ever.
Inflation is expected to be about 5% to 7% for the year, with pricing increases around 1%, indicating pricing below inflation.
North America retail showed improvement excluding cold cuts and bacon, with a 2.7% decline in the latest 4-week period versus a 4% year-to-date decline.
Tariffs are expected to impact margins by approximately 100 basis points this year, with a potential full-year annualized impact of 180 basis points if tariffs remain.
The second quarter results came in line with expectations, showing an improvement in year-over-year top line performance.
Adjusted diluted EPS increased 28% to $1.19 per share, significantly outpacing adjusted EBITDA growth due to accretive share repurchases.
Adjusted gross profit grew 5% to $1.8 billion, supported by volume growth, improved cost of goods, disciplined inventory management, and increased private label penetration.
Net sales increased 3.8% to $10.1 billion, driven by 0.9% case volume growth and 2.9% food cost inflation and mix impact.
Operating cash flow increased by $104 million to $725 million year-to-date, supporting record capital investments and $273 million in share repurchases.
US Foods delivered record second quarter adjusted EBITDA of $548 million, a 12% increase year-over-year, with an all-time high adjusted EBITDA margin of 5.4%, up 40 basis points.
Away-from-home channels grew high single digits and contributed margin-accretive growth for both beverages and foods.
North America faced volume challenges but showed signs of stabilization and improvement in key subsegments like extruded snacks and no-sugar colas.
PepsiCo reported solid Q2 2025 results with strong performance in International markets and sequential improvement in North America.
Productivity initiatives are expected to accelerate in the second half of the year, with a focus on cost reduction and efficiency improvements across the enterprise.
The International business delivered mid-single-digit growth and became accretive to PepsiCo's overall profitability.
Adjusted EBITDA loss widened to $26 million (minus 34.7% of net revenues) from $23 million (minus 24.7%) year-over-year.
Cash and cash equivalents were $117.3 million with total debt approximately $1.2 billion as of June 28, 2025.
Gross margin declined to 11.5% from 14.7% a year ago, impacted by lower volumes, unfavorable product mix, higher trade spend, and $1.7 million in expenses related to suspension of China operations.
Net cash used in operating activities increased to $59.4 million for the first half of 2025 compared to $47.8 million in the prior year period.
Net loss was $33.2 million or $0.43 per share, slightly improved from $34.5 million or $0.53 per share in the prior year period.
Net revenue for Q2 2025 was $75 million, down 20% year-over-year, primarily due to softness in the U.S. retail channel and international foodservice segments.
Operating expenses were $47.4 million, slightly lower than $47.6 million in the prior year, but included $7.5 million in nonrecurring expenses; excluding these, operating expenses showed meaningful reduction.
Dafinchi
