PepsiCo (PEP) posted third quarter results that beat Wall Street's expectations on Thursday but lowered its profit outlook as the company works to regain momentum in the US market.

"We continue to operate with a high sense of urgency to sustainably improve the company's financial and marketplace performance (most notably in North America)," PepsiCo CEO Ramon Laguarta said in prepared remarks.

PepsiCo's revenue grew 5.6% year over year to $25.27 billion, just beating the Street's expectations of roughly $25 billion. Adjusted earnings per share came in at $2.34, slightly higher than the $2.29 per share expected, per Bloomberg consensus data.

Tariff refunds totaled $178 million in the third quarter, benefiting the beverage business, executives said.

For fiscal year 2026, the company now expects net revenue to come in at the high end of its range, up approximately 6%. But PepsiCo lowered its forecast for core earnings per share growth to 2.5%-3%, down from the low end of a 5%-7% range.

The stock rose by about 1% in early trading following the results.

The company said it saw results from innovation around portion control, multipack offerings, protein, fiber, and simpler ingredients, with strong performance from its NKD, Doritos Protein, and Lays Baked with Olive Oil products. On the beverage side, lower-sugar Gatorade and zero-sugar Pepsi Treats drove results.

However, the company reiterated its plans to raise prices by 15% this year to offset higher input costs. Earlier this year, Pepsi lowered prices, which led its North America core operating margin to decline by 280 basis points.

The company said the price reduction led to positive volume, unit growth, and share gains in its US snacks business, following low-single-digit volume declines.

The return to growth gives "flexibility … to absorb this new wave of inflation that is coming to every country, not only the US, given energy prices and given agricultural prices," he said, "We're putting some guardrails to our people, making sure that next year's pricing is going to be below [25%]."

The company doesn't expect inflation pressures to end anytime soon, as "commodities continue to ramp up," CFO Stephen Schmitt told investors.

Laguarta told investors that the company is also working to cut costs and hinted at potential layoffs.

"Additional structural cost reduction actions are being identified and will be implemented in the coming months to help fund investments that aim to accelerate organic revenue growth and mitigate the impacts of rising input cost inflation," Laguarta said.