PepsiCo Stock Pops After Strong Q2 -- Global Sales Do the Heavy Lifting

PepsiCo's (PEP, Financials) second-quarter update makes investors happy.

Shares of the food and drink giant rose more than 6% on Thursday morning, their greatest one-day increase in more than four years, after the business announced earnings that were better than expected.

PepsiCo's earnings per share for the quarter ending June 14 were $2.12, and its organic sales growth was 2.1%, which was better than what analysts had expected. The company also kept its full-year outlook, which is a good sign in a consumer market that hasn't been very stable.

What drives it the most? Demand from other countries. The North American business is starting to get better, but the quarter's rise was mostly due to good sales overseas.

Our international business kept going strong, stated CEO Ramon Laguarta. He also said that Pepsi's U.S. operations are starting to get better at what they do and become more competitive in important categories and sales channels.

As customers move toward healthier products and budget-friendly private-label brands, PepsiCo has been under a lot of stress. The business says it is putting more money into high-protein snacks, smaller container sizes, and simpler ingredients as a result. Some items may soon not have any artificial colors at all.

The plan is to protect and adapt. PepsiCo's huge worldwide portfolio, which includes Doritos, Gatorade, Tropicana, Quaker Oats, and more, nevertheless takes up a lot of shelf space. But upstart wellness products are taking away market share, and PepsiCo realizes it needs to change to be competitive.

PepsiCo's stock was down 11% for the year as of the earnings report, while the S&P 500 had gone up about 6.5%. The surge on Thursday helps lessen that gap, but investors will be keeping a close eye on the North American rebound to see if it lasts through the rest of the year.