PepsiCo earnings Q2 2018

Chris Rank | Bloomberg | Getty Images

A woman grabs a bottle of Diet Pepsi in Atlanta, Georgia.

PepsiCo reported second-quarter earnings on Tuesday that beat analysts’ expectations, boosted by the continued strength of its Frito Lay snack business.

The company’s snack business, which includes brands like Tostitos, grew 4 percent. Its North American beverage business, which includes brands like Gatorade and its namesake cola, dropped 1 percent, still an improvement over previous quarters.

Here’s how the company did compared with what Wall Street expected:

• Earnings: $1.61 per share vs. $1.52 per share forecast by Thomson Reuters
• Revenue: $16.09 billion vs. $16.04 billion forecast by Thomson Reuters

Pepsi’s North American beverage business, has been struggling to contend with increased competition from upstart brands and changing consumer tastes. CEO Indra Nooyi last quarter placed the blame for slowing sales on Coca-Cola‘s increased spending on advertising, though she did not address the Atlanta-based beverage giant by name. She said Pepsi would respond by increasing spending on its trademark cola brand and improve brand communications.

Pepsi’s Frito-Lay snack business, meantime, continues to thrive. Pepsi in May announced its acquisition of baked fruit and vegetable company Bare Foods as part of its efforts to keep its business on trend with today’s snackers. Investors will likely expect an update on how that acquisition fits within its broader strategy.

Still, the U.S. remains challenging for all consumer giants, where pressured retailers and rising costs are squeezing margins. Pepsi has seen some of its strongest performances internationally and last quarter reported revenue growth in Latin America and Europe Sub-Saharan Africa of 14 percent and 15 percent, respectively.