Kevin: Good morning and welcome to PepsiCo's 2026 first quarter earnings question and answer session. Your lines have been placed on listen only until it is your turn to ask a question. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Ravi Pamanani, Senior Vice President of Investor Relations. Mr. Pamanani, you may begin.
Ravi Pamanani: Thank you, Kevin. Good morning, everyone. I hope everyone has had a chance this morning to review our press release and prepared remarks, both of which are available on our website. Before we begin, please take note of our cautionary statement. We may make forward-looking statements on today's call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, April 16, 2026, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. Please refer to our first quarter 2026 earnings release and first quarter 2026 Form 10-Q available on pepsico.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta, and PepsiCo's CFO, Steve Schmidt. We ask that you please limit yourself to one question. And with that, I will turn it back over to the operator for the first question.
Kevin: Thank you. In order to ask a question or make a comment, please press star followed by 1-1 on your touchtone phone at any time. If your question has been answered or you wish to move yourself from the queue, please press star followed by 1-1 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Darrell Moschetti with Morgan Stanley. Your line is open.
Darrell Moschetti: Hey, good morning. So you guys are first up in large-cap staples, so I thought it was appropriate to start with just an update on any impacts from the Iran conflict that are now contemplated in guidance and how that ties to your full-year earnings visibility. So first, maybe, Steve, on the cost side, Just can you highlight what's changed in terms of your cost assumptions, any sizable pressure points individually as you think about the cost situation, and also if you're more locked in at this point on costs with hedging and contracts or a bit more open-ended for the full year? And I'm presuming costs have gone up, so what are the offsets internally as you think about, you know, 2026 earnings visibility? do you think you still have that visibility even with the external volatility and then Ramon if I can slip a second one in maybe you can just touch on international demand obviously another solid quarter continuation of momentum there but in theory there's also some macro risk to demand post Iran so if you can touch on the international regions if you're seeing any impact from the conflict later in March or April so far that'd be helpful and again The juxtaposition of sort of internal momentum versus the external volatility and if you think you can drive continued momentum going forward. Thanks.
Steve Schmidt: Hey, Dar, it's Steve. Thanks for the question and good morning, everyone. Obviously, we've been spending a lot of time here. A few things maybe. We've had no major issues from a supply chain standpoint. We're seeing really nice continuity there. The teams are managing it well. I think in times like these, the scale of PepsiCo is really an advantage. I really want to thank our supply chain and procurement teams for the work they're doing. I know they're working around the clock to manage this, and they're doing a really nice job making sure that we continue to service our customers. We do have some systemic hedging programs in place that does give us some near term visibility here. We typically have about six to 12 month hedges in place. Now, our assumption is that inflation will come. The order of magnitude we're still working through, and I think a lot of that is still to be determined. And the way I think about it from my experience on how you manage inflation would be kind of three ways over time. One, you grow your way through it and really leverage your infrastructure. The second is you push harder on productivity. And third, you do have options with your price pack architecture. We'd like to do the majority of it through the first two, but I think the reality is, depending on the magnitude and time that we have inflation, we'll likely play in all three areas to combat the inflation that we'll see. From a visibility and guidance standpoint, our assumption is that we can mitigate what comes our way this year, and that's really reflected in our assumptions on guidance. As you might expect, We've started to begin our work on 2027 scenarios, but we're still working through that and we don't have anything more to share on that today. But Ramon, maybe you take the second part.
Ramon Laguarta: Yeah, Dara, so I would emphasize Steve's point that at this point in the play, the scale of PepsiCo and the resilience we've built over the last few years, especially after COVID and our supply chain, we've built a lot of redundancy. in terms of our key materials and multiple supply points for our key materials. So that's giving us an advantage, obviously our hedge program. And as Steve mentioned, the seniority and experience of our leaders on the ground make a big difference because they provide agility, they provide good common sense on how to deal with situations, protecting our people, but also driving for growth in moments of complexity. Now, with regards to the international business, as you saw, it's very strategic to our long-term growth strategy. It's one of the key pillars. It's been accelerating, and actually to your question, it continues to accelerate. So we haven't seen an impact on demand since the war started. We have very strong commercial programs. Actually, I would say in some markets we're seeing A benefit because we have a better supply chain than some of our competitors, especially in the food business. So nothing too remarkable at this point. We're executing our very strong commercial programs for the summer. The World Cup is a big driver of execution and innovation during the summer, and the teams are full speed executing that. along with some other transformation of the portfolio. So the international business is very solid, continues to accelerate, and in our guidance we haven't assumed any impact because we're not seeing any at this point.
Kevin: Thank you. One moment for our next question. Our next question comes from Andrew Teixeira with J.P. Morgan. Your line is open.
Andrew Teixeira: Thank you, good morning everyone. I was hoping to see if you can talk about PF&A a bit more in detail and congrats on the volume inflection. Can you talk to us about like how the programs have been progressing as we go through the quarter and how sustainable do you see this performance if you had, I mean some of the investors may have asked if you had some benefit from Shipping Ahead of the Shelf Resets, and then the Winter Storms as well. And if you can comment on that and how has the repeat rates been in your view for the refilling of those orders? Thank you.
Ramon Laguarta: That's good, Andrea. So if you step back for a minute, early last year in the springtime, we defined the new strategy for the company. focused on growth and very strong productivity to fund the growth. The company has been executed across all the different sectors, this strategy with rigor and a sense of urgency. And we've seen results in Q4 and continuous sequential improvement in Q1, as you saw. Now, when you go down to the North America foods business, this was a holistic commercial study focused on growth. There was some additional value to the consumer. There was more space. There was a restage of some of the key brands like Lays and Tostitos. There was a lot of innovation to accelerate our what we call permissible and functional. And there was a repurpose of funds towards away from home to accelerate away from home. All of that is delivering for us. So when you see the 2% volume growth, is a combination of all these elements. More value in some of the core brands, multi-packs and multi-serve is one lever, but it's a much more holistic. We feel good about where we are at this point in the journey. Still in the process of all the shelf resets and launching the innovation. I would say by the end of Q2, we'll probably be almost completed in that process. But the early reads are quite exciting. If you think about 2% volume growth but 4% unit growth, we have increased 300 million occasions in Q1 in the food business, 300 million new occasions to our business compared to Q1 of last year. The away from home business is growing three times the average of the company. The permissible portfolio is growing double digit in some of the brands. So clearly, all the structural things that we're trying to do are working. And most importantly, and we don't talk so much about it, the productivity decisions that we took early last year are giving us that flexibility and optionality to invest in the food business in a way that we couldn't do earlier. And actually, The cost for North America Foods went down in Q1, which is a remarkable achievement by the team. So we're good. We're feeling encouraged also by the results in the last few weeks where we got positive share, not only in volume, we've had for quite some periods already, but now we have positive share in value as well. which is one of the KPIs that we set for ourselves early on. So good progress. We'll continue to update, but the execution is, you know, we're in the middle of this reset execution, but feeling very good about how the brands are reacting, how the customers are supporting, and how the teams are executing in the marketplace.
Kevin: Thank you. One moment for our next question. Our next question comes from Bonnie Herzog with Goldman Sachs. Your line is open.
Bonnie Herzog: All right, thank you. Good morning, everyone. I had a quick follow-up on PFNA. I just wanted to verify that you still expect to deliver both organic revenue growth and core operating margin expansion this year for the business. And then I do have a question, I guess, on the volume pressures you're seeing at PB&A. I assume your volumes have been pressured as you continue to roll out smaller pack sizes for affordability, and then you're leaning in on your price pack architecture initiatives. But I guess hoping for some color on what's continuing to pressure volumes and maybe your strategy to drive better volume growth this year. I guess, should we assume PB&A volumes will be negative this year but declines will moderate and improve for the next few quarters? Thanks.
Steve Schmidt: Thanks, Bonnie. This is Steve. Let me talk about the PF&A, I guess, margin question I think you asked. If I take a step back, if I look at the total company, core operating margin increased about 10 basis points. We did have a property sale gain from last year in the PF&A business that negatively impacted that, so it would have grown, expanded a little bit more without that. We had organic revenue increase 2.6%, core EPS increase 9%, so we're pleased with how the total company performed. For PF&A specifically, we're going to continue to play offense. We're investing in value, we have exciting innovation, we're supporting that with additional advertising and marketing, and we're growing volume in sales. So we affirmed our guidance today. We'll manage margin as a total company, but we want to give ourselves as much flexibility as possible within the segments to do what's necessary to hit our guidance overall.
Ramon Laguarta: Yeah, and Bonnie, on the North America beverages business, we've been, you know, we're talking about this case-backed water transition to a third party. That's still part of the numbers in Q1. It will, I think it laughs at... in P4, so we only have one more month to lab. If you excluded that transition, the volume is actually almost flat, and we expect that that acceleration will continue in the coming periods. Now, what's exciting about PB&A at this point is that the business grew 9%, right, 9%. Now it's a combination of organic growth, revenue growth of two, plus seven points of additional platforms that are now in our distribution system. Some of that is business that we acquire, like Puppy. Some of that is an increased portfolio of energy brands that are generating growth to our business. So we feel good about the 9%. We feel good about the acceleration, the 2% in organic. And we feel good about the fact that we have flat volume, as case by water. and that that progress will, you know, that acceleration will continue in the coming quarters. Our expectation is to have positive volume growth ex case backwater in the coming quarters.
Kevin: Thank you. One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.
Lauren Lieberman: Great. Thanks so much. I wanted to maybe get a little bit more granular, if we can, on some of the trends in the PFNA business, knowing that Nielsen, Scanneria doesn't capture everything. One thing that stood out to us is Lays. Lays is one of the businesses where I think you moved earliest. You had the great Super Bowl commercial, you know, refreshing the visual imagery, you know, emphasizing simple ingredients, price adjustments, and so on. And that business, while it's improving, it still looks pretty weak in aggregate volumes, you know, bumpy but still generally down and organic down pretty significantly. So I just wanted to talk, you know, hear your response to that kind of Next Steps, I would think that's the business that's the toughest in terms of kind of mainstream competition and less differentiation. But, you know, you're the furthest along there. So just maybe, you know, your perspective, what I might be missing on how that turnaround's been progressing from your perspective. Thanks.
Ramon Laguarta: Yeah, Lauren, this is good. The delays... Brand is part of, as I said, a more holistic restage of the full business. This is a global brand restage, so LACE is being restaged globally. It's performing very well globally. It is performing well in the U.S. We grew volume this quarter in LACE in particular. But if you step back and say, okay, what's happening at PF&A? We grew volume 2%, we grew locations units 4%, and we grew 300 million locations in the quarter versus Q1 last year. That took for us some of the success metrics that we're looking at. The other set of KPIs we're looking at is household penetration, and we see household penetration gains across all our core brands. and on top of that we see our permissible portfolio growing, in some cases double digit, brands like SunChips, Smart Food, Ciete and some others. So holistically we think we're in a very good place. The fact that we're back to gaining share in the last three weeks, we use IRI, we don't use Nielsen internally, that's the data point that we have. In IRI we're gaining share in value terms in the last few weeks, and we've been gaining volume share now for, I think, three or four periods. Overall, we think that the consumer is backing our brands, the consumer is coming back multiple times to our brand, responding to our holistic value plus execution plus advertising plus innovation strategy, and there will be more as we execute the full Space Transformation and Innovation Execution, we're very optimistic about the sequential improvement of that business, and I think we're on track actually a little bit ahead of where we thought we would be by now.
Kevin: Thank you. One moment for our next question. Our next question comes from Kevin Grundy with BNP Paribas. Your line is open.
Kevin Grundy: Great, thanks. Good morning, everyone, and congrats on the progress in the quarter. I wanted to ask you both on the organic sales guidance and your expectations for the back half of the year. So I think the existing commentary was that if success with North America Foods and International continues to progress well, et cetera, you could deliver toward the higher end of the two to four in the back half of the year. You sounded good on International to me, maybe even a little bit better despite the conflict. promising with the return to volumes in North American foods and same on with beverages. So I just wanted to see if that is still the expectation that the exit rate for the year is going to be closer to the lower end of your long-term guidance of the four to six. So your comments there would be helpful. Thank you very much.
Steve Schmidt: Sure. Hey, Kevin, this is Steve. Maybe I'll start. Really no change in the guidance from the top line standpoint. We guided two to four in the upper end of that in the towards the back half of the year, and that is a good estimate as we can give you at this point in time. In terms of the progress of the financial performance over the year, I think in the last call we talked a little bit about the year being balanced between the first half and second half, and I still think that's as good of an estimate as we can give you at this point in time.
Ramon Laguarta: Yeah, Kevin, I think if you look at all the The execution of the hungry and thirsty for growth strategy across the company is very positive. So we see an acceleration international, continue that. We've seen momentum in PB&A, both organic and reported, so that is good as well. And sequential growth in PF&A, as I said, probably a little bit ahead of what we thought at this time. So nothing has changed for us to... to give you guys a different guidance on how we see the business evolving and where we plan to be by the end of the year.
Kevin: Thank you. One moment for our next question. Our next question comes from Filippo Filoni with Citi. Your line is open.
Filippo Filoni: Hi, good morning, everyone. I wanted to ask a follow up on PF&A, especially on the innovation and the distribution gains that you're expecting. Ramon, you mentioned you should be mostly done by the end of Q2. So how should we think about the relative size of Distribution gains and the contribution from innovation in Q2 versus Q1. You have a lot of products shipping in Q2, like Doritos Protein, Good Warrior, Smartfood, Good Fiber. So I'm just curious, like, your plans into Q2 in terms of innovation contribution, and then the distribution gain, should we see an acceleration into late April and May? If you can comment on that, that would be great. Thank you.
Ramon Laguarta: Yeah, Filippo, I think we are obviously different launches, different stages of ACB that we have, but if you think about the majority of our innovation is, let's say, 40-50% ACB at this point, so we should expect that we accelerate that in the balance of the quarter and into the summer. The same with the planograms resets were probably 50% more or less in the process of transformation of the space for the year. The space gains that we are getting from our retail partners are pretty much as we expected. Some customers a bit more, some customers a bit less, and we continue to work with them in win-win situations. programs for the summer where this category is very relevant to consumers. So that's more or less the journey that we're in and why we think that we would be accelerating the business in the summer, I mean, towards the summer.
Kevin: Thank you. One moment for our next question. Our next question comes from Michael Lavery with Piper Sandley. Your line is open.
Michael Lavery: Thank you. Good morning. Can you just maybe unpack some of the top line in PF&A a little bit more and maybe elaborate on the timing of some of the price adjustments? Obviously, we see the second price down, but just modestly in the first quarter. How much more is in place versus maybe still to come? And then just on some of the category assumptions looking ahead, some of the snap revisions and cuts are still quite early. Anything you're seeing or how you're factoring that into guidance and just, you know, maybe some thoughts on your expectations for GLP-1 impact.
Steve Schmidt: Maybe I'll, this is Steve, maybe I'll take the SNAP question. We did have eight states. There were eight states that began restriction in the first quarter. It's mainly beverages and candy. I think it's too early to come to any definitive conclusions right now in terms of impact. It's obviously something we'll watch closely. See how customers balance SNAP funds with other discretionary income for purchases over time. I think the LRB category overall remains robust, and we'll continue to monitor it.
Ramon Laguarta: Yeah, and to complement what Steve said, on the food side, we're seeing the savory snacks category accelerating. Part of that is our efforts, obviously, to bring more consumers into the category. Our retail partners are Working with us in that journey is a very relevant category to everybody. We're seeing that category accelerating. In many parts of the world, savory snacks is growing ahead of food. In the U.S., some weeks is already growing ahead of food, which is a good sign, and we're gaining share of that category. So overall, we see LRB consistently growing above food and beverages. and we've seen savory snacks continuing to accelerate and eventually stabilizing and growing ahead of food and beverages, which has been the historic norm in the past. We've always talked that as leaders of the savory snack category, one of our key objectives is to make sure that the category is healthy and we continue to bring consumers into the category. Some of them have lapsed. They're coming back. innovating to bring more families, more consumers into the category. So that's the assumption for balance of the year. And so far, it's so good. As I said, we've brought in a lot of consumption locations into the category in Q1, and we see the same trends in Q2.
Kevin: Thank you. One moment for our next question. Our next question comes from Robert Moscow with TD Cow, and your line is open.
Robert Moscow: Thanks for the question. You talked about your market shares in PFNA. I want to know if you could talk about it in PBNA also. Is it fair to say that on a value basis, you know, those shares are still in decline? And is that part of your strategic review? Will you be evaluating, you know, how to improve market share as well as what I think we're all focused on, you know, the bottler network? Thanks.
Ramon Laguarta: For sure. I mean, obviously market share is a key. But let's step back for a minute. PB&A is growing 9% total business, right? So, you know, we're growing at an accelerated way, including energy. So we see ourselves participating in the energy portfolio through our Celsius investment and our distribution of Celsius. That's gaining share. We see ourselves obviously very statistically leading the functional hydration category, and that category is accelerating. For the first time in several years, we see functional hydration, including spores and the rest of functional hydration, growing ahead of LRB. That's a key objective for us as well. We see Gatorade and Propel gaining share there. We still have some work to do on accelerating the coffee business and accelerating the tea business where we're also leaders. Some of the innovation that we have in the Starbucks portfolio is intended to do that. And then in CSDs, we continue to have good growth in modern soda, which is a segment that keeps accelerating. Our poppy business is starting to accelerate now in Q2. and then obviously we have opportunities with Mountain Dew that we have highlighted for quite some time. Now some of the innovation that we've put on the market, early Indians, but both the dirty Mountain Dew and Baja and Cabo, different flavors on the Mountain Dew are starting to grow the brand which is very encouraging for us. And then on the Pepsi business, You know, we're lapping some of the events that happened last year. We continue to see No Sugar Pepsi growing ahead of competitors. And we are optimizing pricing, sizing on the rest of the business to participate in a better way during the summer period. So overall business, we feel good about the 9% top line growth and how we're participating in different segments of the of the category to drive the growth for PB&A.
Kevin: Thank you. One moment for our next question. Our next question comes from Peter Grom with UBS. Your line is open.
Peter Grom: Thanks, operator, and good morning, everyone. I wanted to ask a follow-up on PF&A. You mentioned in the prepared remarks that you expect sequential improvement for the division in 26. So I just wanted to clarify if that was a broad-based comment or should we expect organic sales to continue to show improvement relative to the 1% growth that you delivered this past quarter? And I guess if it's the latter, can you maybe provide some guardrails around what to expect as we think about the balance of the year? Thanks.
Ramon Laguarta: Our current assumptions is we continue to accelerate organic, first volume, we continue to grow volume, which is consumption units into the brands, consumption acts. We'll continue to accelerate organic and reported revenue growth. Ciete becomes organic as of next quarter, I think. and then our intentions and how we're thinking about the balance of the year is growing our profit growth in North America Foods again. That's how we're thinking about the business sequentially. Now, Steve mentioned that we're going to manage the business as part of the broader portfolio. We're going to continue to be on the attack trying to make sure that we stabilize the top line and we continue to make this category, the savory snacks category growing ahead of foods and making this a place where both us and the retailers want to invest and continue to grow for the future.
Kevin: Thank you. One moment for our next question. Our next question comes from Steve Powers with Deutsche Bank. Your line is open.
Steve Powers: Great. Good morning, everybody. Ramon, you know, recognizing that it's still early in the PF&A momentum rebuild, I guess, have you seen any meaningful change at all in competitive intensity, whether, you know, pricing promotions or on-shelf behavior? And I guess given the incrementality of, you know, building cost inflation, How do you think the food industry broadly will balance what our clear consumer affordability concerns with producer needs to offset costs? Is there a chance that that could interrupt your own affordability investments? Or I guess conversely, are you looking at that as a potential natural limitation on the risk of more aggressive competitive pricing response to your own actions as you build through the year? How do you think about those dynamics? Thank you.
Ramon Laguarta: I'm sure there will be, you know, as we enter the high season for the category in the summer with all the big holidays, I'm sure there will be more competitiveness in the category. But we have our plans for this. It's not only price. It's trying to provide that the growth strategy for Frito is not only price. Price is one element, obviously, that is very relevant for many consumers to get back to our category. but it's innovation, it's execution, it's making sure that all the elements in retail and away from home continue to be successful. Now, with regards to the productivity story that we have, I don't know if our competitors have the same productivity story but we've been focused on reducing cost, cost per unit and overall cost for the food business and all the North America business and across the company actually and that has been a very successful strategy for us. We still have a lot of non-executed drivers of productivity in the coming quarters and years that would help us continue to give consumers the right value and compete probably in a better way against the other food manufacturers. So that's how we're thinking about the next innings in the journey and we'll see how inflation behaves as Steve said earlier We're going to play a full portfolio. I want to make sure that we win in the marketplace with PF&A whilst we continue to deliver the overall profit growth targets for the full organization.
Kevin: Thank you. One moment for our next question. Our next question comes from Robert Ottenstein with Evercore. Your line is open.
Robert Ottenstein: Thank you very much. So most of the focus today has been on the top line. I'm wondering if we could kind of dive into, and you just started to touch on it a little bit, the productivity programs. I think you mentioned that you're on track to having perhaps a record year on productivity. So can you talk about maybe the major buckets for productivity? What you're doing maybe differently this year than in prior years, because you've obviously been focused on productivity for a number of years, and then how you see that productivity gain scaling up through this year and into next year. Thank you.
Steve Schmidt: Sure. Thanks for the question. This is Steve. Well, productivity is one of these never-ending battles that we're going to have. We are benefiting from some of the moves from last year, the reduced headcount, plant closures, reduction in SKU count. It's encouraging to see key metrics like cases per hour in our supply chain continue to improve. So we've got some things that are really working in our favor that allow us to play offense as much as we have to grow volume. We're going to continue to remain very focused on customer service measures while we do this and reduce expenses. I think overall we have more work to do on the total company cost structure. It's little things that we'll look at, like just different things in the supply chain. It's like whether overtime hours are trending the way we want, the little details of how we're operating to make sure that we get the operating metrics really in line with where we need them to be to drive the productivity overall in the company. But we have good progress there. We have lots of work to do, and it's a big part of our strategy to make sure we continue to play offense.
Ramon Laguarta: Yeah, and also I would add, Some of the big drivers that we've been talking about in the past, we continue to execute. So global share services, deploying technology across the company and AI, both in our supply chain, but also how we do transportation, how we optimize routes. You think about in many countries around the world, we're moving to digital ordering systems where we reduce the number, the time that are salesmen spec to take an order. We're leveraging technology in a very holistic way and AI and data to drive efficiency and transformation of cost, not only efficiency across the system, both supply chain and go-to-market, the two big buckets. We're also optimizing our advertising and marketing. We're getting better at the multi-year journey on return on investment, on marketing and trade. So those are two big demand budgets that we're optimizing. So if you think about where we are in the journey, we're in the multi-year journey, and we're executing all these strategies across all of our anchor markets, obviously, including the US. And we're testing and learning the idea of can we create more value, both growth and cost, by integrating more of the supply chain in the U.S., and we're live in some tests in Texas, and we're gonna deploy that in some other states. That is another vector of cost transformation going forward that we're gonna learn more in the next few quarters and update you guys later in the year, early next year.
Kevin: Thank you, one moment for our next question. Our next question comes from Camilo Garguala with Jefferies. Your line is open.
Filippo Filoni: Hey, guys. Good morning. Ramon, you had mentioned the very substantial increase in the number of occasions. Can you maybe dig into that a little bit more? Who are these consumers or what are those occasions? Are they different from the core? It just sounds like it was obviously quite a success so far. I'd just like to learn more about what's behind it. Thanks.
Ramon Laguarta: I'll give you a couple of examples, Camille, so you can get a sense. Obviously, by optimizing the value in some of our multi-serve and multi-packs, both in Lay's, Doritos, Ruffles, etc., and also in Gatorade, we are bringing lapsed consumers into the brand. So these are consumers that had left the brand, either moved to a you know stop buying the category or moving somewhere else so that that that is kind of growth in the core at the same time if you think about the consumers that are coming into the category because of innovations like naked or we're seeing already some in in some of the innovation from Gatorade with no artificial slow sugar we're seeing consumers that were not in the category but because they loved our favorites. Now we're offering solutions with no colors, no artificial colors, no artificial flavors, and they're coming back to the category. So two types of consumers coming into the category because both of a stronger core and also innovation that drives incrementality to the category. And I think we're going to continue to play both levers. The other, you know, obviously that applies to both foods and beverages, and we will continue to do this not only in the U.S., but also in our international markets where we're starting to deploy some of the innovation from the U.S., and we're seeing also an acceleration of the category, especially developed markets in Europe.
Kevin: Thank you. One moment for our next question. Our last question comes from Chris Carey with Wells Fargo Securities. Your line is open.
Chris Carey: Hey, guys. Thanks. Just back to BF&A, way back to the beginning of the call on Bonnie's question. Did you change your investment targets or goals for the business this year? And if so, where are you seeing greater opportunity to invest? And Ramon, you flagged the World Cup. as an activation event. What does a World Cup activation look like for PepsiCo, perhaps specifically for Frito? How is it different versus past events, and are you embedding any of that uplift in your outlook?
Steve Schmidt: Hey, Chris and Steve, thanks for the question. The comments I was making earlier, I think, to Bonnie's question is that we just want to give ourselves as much flexibility as possible to manage all of the sectors and all of our businesses to hit the numbers that... that we've given you with our guidance. So that's what I was just trying to illustrate is that we want as much flexibility. There's a lot happening in the world that we need to manage and navigate through, and so we're gonna give ourselves as much flexibility within the business to make the decisions that are right for the total company.
Ramon Laguarta: That's good. No, listen, and World Cup is a, obviously we're sponsors on the food side across the world, so this is obviously a, a very big opportunity to engage consumers. This is a real passion point for many consumers. I mean, I'm a big fan of soccer and I see how we feel at that moment. Now, it's very holistic. If you think about innovation, we're going to have flavors from around the world being executed in every market. Obviously, there's space gains, there's activations, but most importantly, from the consumer occasions point of view, we're working on No Lays No Game, which is kind of an activity or a campaign that we've been executing globally for quite some time. We'll double down on that with some of our global football players, and the idea is link Lays to the occasion of sports watching and making sure that when there is gatherings of consumers watching, you know the game this is activated we're going to personalize obviously for different we know more or less you know who supports what team and then we're going to be able to personalize the communication to a consumers we're going to have a fan of the match so we're going to have different activations in every game where where our our latest brand will nominate fans of the match We're going to have Quaker participating as well in the event. As the players walk into the stadium, the little children will have Quaker brand and that's going to be part of a restage of Quaker globally. And then obviously we have partnerships with our retailers and quick delivery partners around the world to make sure that we capture those occasions in the moment, and consumers have the opportunity to order Lays and to order some of our drink combinations to enjoy the game with friends. So a lot of vocation development, a lot of brand awareness, a lot of personalization, and some innovation to drive excitement across the world, obviously space gains and retail partnerships. So it's a very holistic and many more. We're excited and we can already see some of the acceleration in some of the international markets because of this activation. Thank you very much for your questions and your support, and thank you for the confidence you've placed in us in PepsiCo, and I look forward to further conversations in coming quarters. Thank you very much.
Kevin: Ladies and gentlemen, that concludes today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.
