PepsiCo Inc. (NASDAQ:PEP)

The profitability metrics exhibited varied trends over the observed period. Generally, gross profit margin demonstrated an increasing trend, while operating and net profit margins experienced more fluctuation. Return on equity and return on assets also showed variability, with a noticeable decline in the earlier part of the period followed by recovery.

Gross Profit Margin

The gross profit margin consistently increased from 53.20% in March 2022 to 54.74% in March 2025, peaking at 54.68% in September 2024. This indicates improving efficiency in production and cost of goods sold management. A slight dip to 53.96% in September 2025 was observed, but remained above the initial value. The overall trend suggests a strengthening ability to generate profit from core business activities.

Operating Profit Margin

The operating profit margin displayed a more volatile pattern. It decreased significantly from 17.46% in March 2022 to a low of 10.08% in March 2023. A subsequent recovery was observed, reaching 13.10% by December 2022 and peaking at 14.03% in December 2023. However, it declined again to 11.03% in September 2025 before recovering to 12.24% in December 2025. This suggests potential fluctuations in operating expenses or increased competitive pressures impacting profitability.

Net Profit Margin

Similar to the operating profit margin, the net profit margin experienced a decline from 12.57% in March 2022 to 7.48% in March 2023. It then showed improvement, reaching 9.92% by December 2022 and 10.34% by June 2024. A decrease to 8.23% was noted in March 2025, followed by a recovery to 8.77% in December 2025. This pattern indicates that changes in factors beyond operating income, such as interest expenses or taxes, also influence overall profitability.

Return on Equity (ROE)

Return on equity exhibited a substantial decrease from 55.85% in March 2022 to 38.62% in March 2023. The metric then recovered, reaching 49.04% by December 2022 and peaking at 53.09% in December 2023. A subsequent decline to 37.26% in September 2025 was observed, followed by a partial recovery to 40.38% in December 2025. This suggests fluctuations in net income and/or shareholder equity significantly impacted returns to shareholders.

Return on Assets (ROA)

The return on assets followed a similar trajectory to ROE, decreasing from 10.93% in March 2022 to 7.07% in March 2023. It then improved, reaching 9.03% by December 2022 and 9.63% by December 2023. A decline to 6.78% was observed in September 2025, with a subsequent recovery to 7.67% in December 2025. This indicates that the efficiency with which assets are used to generate profits also experienced variability.

In summary, while gross profit margin demonstrated consistent improvement, the operating and net profit margins, along with ROE and ROA, experienced more pronounced fluctuations, particularly a significant dip in the earlier portion of the analyzed period. The latter half of the period showed a recovery in these metrics, although some volatility remained.

The gross profit margin demonstrates a generally positive trend over the observed period, with some quarterly fluctuations. Initial values in the first quarter of 2022 were approximately 53.20 percent, and the metric generally increased through the end of 2023, before stabilizing and showing minor fluctuations in 2024 and 2025.

Overall Trend

From March 2022 to December 2023, the gross profit margin exhibited an upward trajectory, increasing from 53.20 percent to 54.21 percent. This suggests improving efficiency in production or sourcing, or a shift towards higher-margin products during this timeframe. The rate of increase appeared to slow in late 2023.

Short-Term Fluctuations

While the overall trend is positive, quarterly variations are present. A slight decrease is observed between March 2022 and September 2022, followed by a more substantial increase in December 2022. Similar patterns of incremental gains and minor declines are visible throughout 2024 and 2025, indicating potential seasonality or the impact of specific promotional activities.

Recent Performance (2024-2025)

The gross profit margin remained relatively stable between 54.13 percent and 54.74 percent throughout 2024. The first half of 2025 saw a slight dip to 54.43 percent, followed by a recovery to 54.15 percent by the end of the period. This suggests a continued ability to maintain profitability despite potential cost pressures or competitive dynamics.

Peak and Trough Values

The lowest observed gross profit margin was 53.03 percent, recorded in both June and September of 2022. The highest value, 54.68 percent, was achieved in June 2024. These represent the extreme points within the analyzed timeframe.

The consistent gross profit margin, generally above 53 percent, indicates a strong ability to control the cost of goods sold relative to revenue. The observed increases suggest successful strategies in managing production costs or product mix, while the minor fluctuations highlight the influence of external factors and internal business decisions.

The operating profit margin exhibited fluctuations over the observed period, beginning in March 2022 and extending through December 2025. An initial period of relative stability was followed by a notable decline and subsequent recovery, with variations occurring throughout the year.

Initial Period (Mar 2022 - Dec 2022)

The operating profit margin commenced at 17.46% in March 2022. A gradual downward trend was observed through the remainder of 2022, decreasing to 13.33% by December 2022. This decline suggests potential pressures on operational efficiency or increased costs relative to revenue during this timeframe.

Recovery and Stabilization (Mar 2023 - Dec 2023)

The first half of 2023 showed a recovery, with the margin increasing to 11.60% in June 2023. Subsequent quarters in 2023 demonstrated further improvement, reaching 13.10% by December 2023. This indicates successful implementation of cost control measures or increased pricing power.

Fluctuations and Recent Performance (Mar 2024 - Dec 2025)

The margin continued to fluctuate in the following periods. It peaked at 14.03% in December 2024 before decreasing to 11.44% in March 2025. The final quarters of the observed period show a slight upward trend, with the margin reaching 12.24% in December 2025. This suggests ongoing sensitivity to external factors or internal operational changes.

Overall, the operating profit margin demonstrates a cyclical pattern. While a clear long-term trend is not immediately apparent, the company experienced a period of decline followed by recovery and subsequent stabilization with ongoing fluctuations. The variations observed throughout the period warrant further investigation into the underlying drivers of profitability.

Seasonal Patterns

A potential seasonal pattern is observable, with margins tending to be lower in the December quarters compared to the June quarters. This could be attributed to increased promotional activity or seasonal cost increases during the year-end period.

The operating profit margin’s performance appears to be influenced by a combination of factors, including revenue fluctuations and cost management strategies. Continued monitoring of these ratios is recommended to assess the sustainability of profitability and identify potential areas for improvement.

The net profit margin exhibited fluctuations over the observed period, spanning from March 2022 to December 2025. An initial period of relative stability was followed by a notable decline and subsequent recovery, with variations occurring throughout the year.

Initial Period (Mar 2022 - Dec 2022)

The net profit margin began at 12.57% in March 2022 and demonstrated a gradual decrease through the end of the year, concluding at 10.31% in December 2022. While not precipitous, this represents a consistent downward trend over nine months.

Significant Decline and Recovery (Mar 2023 - Jun 2023)

A substantial decrease was observed in the first quarter of 2023, with the net profit margin falling to 7.48% in March 2023. This was followed by a recovery in June 2023, reaching 8.76%. This period indicates potential short-term volatility impacting profitability.

Stabilization and Peak (Sep 2023 - Dec 2023)

From September 2023 to December 2023, the net profit margin showed a strengthening trend, increasing from 9.05% to 9.92%. This suggests improved operational efficiency or favorable market conditions during this timeframe.

Fluctuations and Recent Performance (Mar 2024 - Dec 2025)

The period from March 2024 to December 2025 demonstrates continued fluctuation. The margin peaked at 10.43% in December 2024, then decreased to 8.23% in March 2025, followed by increases to 7.82% in September 2025 and concluding at 8.77% in December 2025. This suggests ongoing sensitivity to external factors or internal operational changes. The most recent values indicate a return to levels comparable to those observed in mid-2023.

Overall, the net profit margin demonstrates a cyclical pattern with periods of decline, recovery, and stabilization. While a general trend is not readily apparent across the entire period, short-term fluctuations are consistently observed. The most significant drop occurred in early 2023, followed by a period of improvement and subsequent variability.

The Return on Equity (ROE) for the analyzed period demonstrates considerable fluctuation, though generally remains at a healthy level. Initial values are strong, followed by a period of decline, and then stabilization with some renewed increases towards the end of the observed timeframe.

Initial Period (Mar 19, 2022 – Dec 31, 2022)

The ROE begins at 55.85% in March 2022 and experiences a decrease to 49.78% in June 2022. A slight recovery to 51.19% is noted in September 2022, followed by a further increase to 51.96% by the end of the year. This initial period suggests a relatively high and stable return on equity, despite some quarterly variation.

Decline and Recovery (Mar 25, 2023 – Sep 9, 2023)

A significant decline in ROE is observed in March 2023, falling to 38.62%. This is followed by a recovery to 44.67% in June 2023 and a further increase to 44.08% in September 2023. This period indicates a potential challenge to profitability or efficiency, followed by a partial correction.

Stabilization and Recent Trends (Dec 30, 2023 – Dec 27, 2025)

From December 2023 through March 2024, the ROE remains relatively stable, fluctuating between 49.04% and 48.95%. A notable increase to 53.09% is seen in December 2024, followed by a slight decrease to 50.95% in March 2025. The ROE then declines to 40.99% in June 2025, 37.26% in September 2025, before a modest recovery to 40.38% by December 2025. This suggests a recent period of increased volatility, with a downward trend in the most recent quarters.

Correlation with Net Income and Equity

The fluctuations in ROE generally correlate with changes in net income attributable to the company. Periods of lower net income, such as in December 2022 and June 2025, correspond with lower ROE values. Total shareholders’ equity also exhibits variation, but the impact on ROE appears more directly tied to net income performance. The decrease in ROE in the latter part of the period, despite increasing equity, suggests that net income growth has not kept pace.

Overall, the ROE demonstrates a pattern of initial strength, a mid-period decline, and recent stabilization with increasing volatility. Continued monitoring of both net income and shareholder equity will be crucial to understanding the drivers of these fluctuations and assessing future performance.

The Return on Assets (ROA) exhibited fluctuations over the observed period, spanning from March 2022 to December 2025. Initial values indicated a strong performance, followed by a period of moderation and subsequent recovery.

Initial Performance (Mar 2022 - Dec 2022)

ROA began at 10.93% in March 2022, demonstrating a relatively high level of profitability relative to total assets. A slight decrease to 9.92% was noted in June 2022, followed by a recovery to 10.28% in September 2022. The period concluded with a decline to 9.67% by December 2022, suggesting a moderate softening in asset utilization efficiency.

Moderation and Recovery (Mar 2023 - Dec 2023)

A significant decrease in ROA was observed in March 2023, falling to 7.07%. This was followed by a recovery through June 2023 (8.24%), September 2023 (8.29%), and December 2023 (9.03%). This suggests potential corrective actions or favorable market conditions impacting asset profitability during this timeframe.

Stabilization and Fluctuations (Mar 2024 - Dec 2024)

The ROA continued to demonstrate stability, ranging between 9.18% and 9.63% from March 2024 through December 2024. This indicates a consistent level of asset utilization and profitability. A slight decrease to 9.31% in September 2024 was followed by a return to 9.63% by the end of the year.

Recent Trend (Mar 2025 - Dec 2025)

A decrease to 9.21% was observed in March 2025, followed by a further decline to 7.17% in June 2025. Subsequent quarters showed a recovery, with ROA reaching 6.78% in September 2025 and concluding the period at 7.67% in December 2025. This recent fluctuation warrants further investigation to determine the underlying causes.

Overall, the ROA demonstrates a cyclical pattern with periods of strength, moderation, and recovery. While generally maintaining a positive return, the recent fluctuations suggest potential challenges or shifts in operational efficiency that may require attention.