Coke and Pepsi earnings to lift consumer staples ETFs?

Soft drink bellwether Coca-Cola Company (KO) reported earnings on Oct. 21, 2025, and Zacks Rank #2 (Buy) PepsiCo Inc. (PEP) reported on October 9.  Both giants came up with upbeat third-quarter 2025 earnings, auguring well for the consumer staples sector.

Coca-Cola beat on both top and bottom lines before the market opened on October 21 but said demand for drinks is still soft, as quoted on CNBC. Shares surged about 4% on the day. PepsiCo shares also rallied about 8.7% after reporting earnings results on early October. Let’s delve a little deeper.

Coca-Cola beats overall, retains view

Coca-Cola’s earnings results have benefited from enhanced pricing across markets. The latest results once again highlight the strength of KO’s resilient, all-weather strategy. Its third-quarter 2025 comparable earnings per share (EPS) of 82 cents were up 6% year over year.

Comparable EPS beat the Zacks Consensus Estimate of 78 cents.Revenues of $12.46 billion grew 5% year over year and topped the Zacks Consensus Estimate of $12.43 billion. Globally, Coke witnessed the largest volume growth from its water, sports, coffee, and tea segments.

The company reiterated its full-year forecast. Going forward into 2026, Coca Cola expects slight currency tailwind to both its revenue and comparable earnings, while for fourth-quarter 2025, comparable revenues are expected to include a minimal currency tailwind.

PepsiCo reports above expectations – Maintains guidance

PepsiCo’sthird-quarter 2025 revenues and EPS came ahead of the Zacks Consensus Estimate. Net revenues of $23.94 billion rose 2.6% year over year and beat the Zacks Consensus Estimate of $23.87 billion. PEP’s third-quarter core EPS of $2.29 surpassed the Zacks Consensus Estimate of $2.27 but declined 0.9% year over year.The company also reiterated its full-year outlook.

Beverage giants respond to price-sensitive and health-conscious consumers

Coke CEO James Quincey said low-income U.S. consumers are cutting back, with more sales coming from dollar stores, as mentioned on CNBC. Coke is responding to this trend with smaller, “affordable” options like mini cans. Similarly, PepsiCo CEO Ramon Laguarta pointed to softer volumes as the company moves to smaller packaging to attract price-conscious buyers – a move that trims volume but boosts revenues, per another CNBC article.

PepsiCo is also overhauling its snack lineup with healthier oils and ingredients under pressure from the “Make America Healthy Again” movement. It’s also cutting prices on multipacks and single-serve snacks to win back budget-conscious consumers, CNBC noted.

ETFs in focus

Against this backdrop, investors may be interested in knowing about the Coke and PepsiCo-heavy ETFs along with their stocks. This is because an ETF approach offers investors the opportunity to bet on both stocks.

Coca-Cola and PepsiCo each have solid exposure to funds like Consumer Staples Select Sector SPDR Fund (XLP), Fidelity MSCI Consumer Staples Index ETF (FSTA)  and Vanguard Consumer Staples ETF (VDC).

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Click to get this free report