PepsiCo faces North American sales slump as Elliott pushes for turnaround

PepsiCo’s North American business is seeing a drop in volume, a situation the company attributes to rising input costs tied to the Iran war and stubborn inflation that is dampening consumer demand. Activist shareholder Elliott, which acquired a stake in September 2025, has pressed PepsiCo for stronger results, prompting the firm to plan a cut of roughly 20% of its U.S. product portfolio by early 2026 and to target a 100-basis-point rise in its core operating margin over the next three fiscal years.

Additional measures include a comprehensive supply-chain review and a refresh of the board of directors. Despite these steps, analysts say sales are still flat, Frito-Lay and Quaker brands fell 2%, and PepsiCo is losing market share to rivals such as Coca-Cola. The company’s enterprise value has slipped to 10 times EBITDA from 18 times in mid-2022, and its shares are down about 12% this year and 16% since Elliott’s involvement. Analysts expect modest revenue growth of 4.3% in the third quarter, with only a slight rise in earnings per share.