Before Tuesday's market open, the soda and snacks giant reported second-quarter earnings of $1.50 a share on revenue of $15.7 billion, compared to estimates for earnings of $1.40 a share on revenue of $15.6 billion.
Beverage companies such as PepsiCo and The Coca-Cola Co. (KO) have been struggling recently to boost sales of sugary, carbonated drinks as more and more consumers shift to healthier eating habits. PepsiCo has the upper hand, though, as it does not rely solely on beverages.
Still, most analysts on Wall Street didn't expect PepsiCo to report a blowout quarter amid challenging conditions in grocery store aisles, namely increased discounting and the shift to healthier products.
In a note published on Monday, July 10, Susquehanna analyst Pablo Zuanic said he was cautious ahead of PepsiCo's second-quarter earnings release, noting in particular that Gatorade has been experiencing sluggish growth overseas. The company itself admitted Tuesday that industry conditions are seeing "profound" change.
TheStreet talked with PepsiCo CFO Hugh Johnston about the company's earnings and his outlook for the beverage and snacks industry. Here is an edited and condensed version of the interview.