Coca-Cola vs PepsiCo: Q2 2026 Earnings Compared

Coca-Cola and PepsiCo reported almost identical headline revenue growth for the second quarter of 2026 (6.7% and 6.4%), but underneath that the two businesses went in opposite directions. Coca-Cola sold more: concentrate volume rose 4% and its own adjusted earnings per share grew 11%. PepsiCo mostly did not: organic revenue grew 2.4%, and its cleanest earnings measure, core constant-currency EPS, rose just 1%. Both companies' reported EPS figures (+16% and +137%) overstate what happened, for different reasons.

This comparison uses only the figures in our two published analyses: Coca-Cola Q2 2026 and PepsiCo Q2 2026. One timing note: the quarters don't line up exactly. Coca-Cola's covers the three months ended July 3, 2026; PepsiCo's covers the 12 weeks ended June 13, 2026.

Side by side

"Adjusted" EPS is each company's own measure that strips out gains and charges it treats as one-offs. Coca-Cola calls it "comparable," PepsiCo calls it "core." Operating margin is the share of revenue left after running the business, before interest and tax.

Why both headline EPS numbers mislead

Coca-Cola's +16% is flattered by items below the operating line. Other income included a $320 million net gain on equity and debt securities (largely paper marks on investments that can reverse) plus a $66 million write-back of an earlier impairment on its African bottling operations. The tax rate also fell to 18.9% from 20.7%, while management still guides to about 19.9% for the full year. Take those out and comparable EPS grew 11%.

PepsiCo's +137% is a comparison against a crushed prior year. In Q2 2025 PepsiCo took a $1,860 million impairment charge, mainly writing down the Rockstar energy-drink brand. An impairment is an accounting write-down: no cash leaves, but reported profit collapses for that quarter. With that one-off gone from the comparison, core EPS rose 4%, from $2.12 to $2.20, and just 1% once the weaker dollar is also stripped out.

So the gap between the two companies holds on the adjusted numbers too: 11% against 4%, and 9% against 1% excluding currency.

What drove each company

Coca-Cola: volume. Four of its seven points of revenue growth came from selling more concentrate, the syrup and beverage base it sells to bottlers, which is how it books most of its revenue. Unit case volume, the measure of finished drinks reaching consumers, rose 5%. North America, its largest segment, added 3 points of volume and 4 points of price, with Trademark Coca-Cola unit cases up 5%. Comparable operating margin rose 0.9 points even as advertising spending jumped 18%.

PepsiCo: currency, an acquisition, and international. Roughly two-thirds of its 6.4% revenue growth came from currency (2.2 points) and acquisitions, principally the prebiotic soda brand poppi (1.8 points). Its two North American segments, 56% of revenue, both struggled. The snacks business (PepsiCo Foods North America) saw revenue fall 2% on "unfavorable net pricing" with volume flat. The beverages business (PepsiCo Beverages North America) grew organic revenue 1% while unit volume fell 4%. International volume growth, led by India, carried the consolidated figures.

Where they diverge, and where they look alike

North American drinks are the sharpest contrast. In the same region and roughly the same months, Coca-Cola's North America unit case volume rose 3%, while PepsiCo's North American beverage volume fell 4%, with non-carbonated drinks down 4% and carbonated soft drinks down 3%.

Margins moved in opposite directions. Coca-Cola's gross margin rose half a point on pricing and currency, helped by selling its lower-margin Nigerian bottling operations. PepsiCo's fell 0.44 points as cost of sales grew 7.4% against 6.4% revenue growth, including what its filing quantifies as a 6-point commodity cost headwind in North American beverages. The gap in margin levels (34.9% against 16.6%) is structural, not a result of this quarter. Coca-Cola's own segments show why: the segments selling concentrate run at 31% to 64% operating margins, while its company-owned bottling operations run at 6.1%.

Tax moved against PepsiCo and for Coca-Cola. PepsiCo's core tax rate rose about 1.2 points on global minimum tax rules, costing it roughly a point of core EPS growth. Coca-Cola's fell 1.8 points, but management expects that to reverse over the full year.

Both are cutting prices to win buyers, in different places. Coca-Cola is doing it in Asia Pacific, where 11% volume growth turned into 1% revenue growth because price/mix subtracted 9 points (cheaper, smaller packs to add drinkers in India and China), while the segment's margin held at 44.1%. PepsiCo is doing it in North American snacks, where the price cuts held volume flat but didn't grow it, and segment profit fell 3.5%.

Latin America looks the same at both. Coca-Cola's Latin America revenue rose 16%, 11 points of it currency. PepsiCo's Latin America Foods rose 15%, also 11 points of it currency, driven mainly by the stronger Mexican peso. At both companies, most of the region's headline growth came from exchange rates rather than more product sold.

Takeaway: Strip out the one-offs and currency, and this quarter separates the two companies clearly: Coca-Cola grew adjusted EPS 9% on real volume gains, including in North America, while PepsiCo grew it 1% as its North American snack pricing and beverage volumes both went negative. The same weak dollar helped both; only Coca-Cola had strong underlying growth to add to it.

What to watch next quarter

Coca-Cola raised its full-year guidance: organic revenue growth of about 5% (from 4% to 5%) and comparable EPS growth of 9% to 10% (from 8% to 9%). Watch the tax rate move back toward the guided 19.9%, and the pending sale of its African bottling operations, now expected to close late in the third quarter or in the fourth. The fourth quarter of 2026 has six fewer days than a year earlier, which will make reported revenue look weaker without any change in demand. An appeals court ruling in its IRS transfer-pricing case is also possible within the next several quarters; the filing estimates potential incremental tax and interest of about $14 billion if it loses.

PepsiCo affirmed organic revenue growth of 2% to 4% and core constant-currency EPS growth of 4% to 6%. It is running at 2.5% and 3% year to date, so the second half has to accelerate. The two numbers our analysis flags: North American snack pricing turning positive without losing volume, and the 4% North American beverage volume decline narrowing. Also worth watching: the contingent payment for poppi has been marked down to $117 million of a possible $300 million, a sign PepsiCo thinks the brand is less likely to hit its targets.