PepsiCo Evaluates Business Split Amid Stagnant U.S. Performance

PepsiCo is evaluating structural changes, including a potential business split, to address stagnant performance in the North American market. CEO Ramon Laguarta stated the company is "open to revisiting every option" to improve long-term performance as shares trade at six-year lows.

The company faces significant headwinds in the United States, including reduced consumer spending on nonessential items and cuts to federal food stamp programs. Additionally, the prevalence of GLP-1 weight loss medications and the "Make America Healthy Again" movement have shifted eating habits. In response, PepsiCo is lowering prices and expanding product lines to include more fiber and protein while reducing artificial colors.

While quarterly revenues rose 5.6 percent to $25.2 billion, growth was primarily driven by international markets, which now account for 41 percent of total revenue. Chief Financial Officer Steve Schmitt warned that input costs are beginning to ramp up as previous hedges roll off. The company's structural review follows previous questioning of its business model by activist investor Elliott Investment Management.