PepsiCo, Inc. stock research
FY2026 Q1
PepsiCo (PEP) Gross Margin — Quarter Ended Mar 21, 2026
Revenue less cost of revenue yields gross profit, and gross margin is the ratio of gross profit to revenue. In the current quarter, gross margin improved sequentially but weakened compared to the same quarter one year earlier.
Gross margin takeaway
Quarter ended Mar 21, 2026 · FY2026 Q1
Revenue less cost of revenue yields gross profit, and gross margin is the ratio of gross profit to revenue. In the current quarter, gross margin improved sequentially but weakened compared to the same quarter one year earlier.
- The gross margin improved sequentially, with cost of revenue declining more sharply than revenue.
- Sequentially, revenue and gross profit were lower, but gross margin improved as cost of revenue declined proportionally more. Year-over-year, revenue and gross profit were higher, but gross margin slightly weakened as cost of revenue grew at a faster pace than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
55.2%
Gross profit
$10.7B
Revenue
$19.4B
Cost of revenue
$8.7B
Quarter-over-quarter change
+1.6 pts
Year-over-year change
-0.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 22, 2025 | $17.9B | $10.0B | $7.9B | 55.8% |
| Jun 14, 2025 | $22.7B | $12.4B | $10.3B | 54.7% |
| Sep 6, 2025 | $23.9B | $12.8B | $11.1B | 53.6% |
| Mar 21, 2026 | $19.4B | $10.7B | $8.7B | 55.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 6, 2025
+1.6 pts
Year-over-year change
Mar 22, 2025
-0.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially, with cost of revenue declining more sharply than revenue.
Sequentially, revenue and gross profit were lower, but gross margin improved as cost of revenue declined proportionally more. Year-over-year, revenue and gross profit were higher, but gross margin slightly weakened as cost of revenue grew at a faster pace than revenue.
Monitor the impact of items affecting comparability, such as mark-to-market net impacts and restructuring charges, as disclosed in the filing.