PepsiCo has reported a drop in net sales and profits for its fiscal first half, but investors have reacted positively after the soft drinks giant reaffirmed full-year guidance.

Net sales for the 24 weeks to 13 June fell by 2% to US$18.85bn, while net earnings slipped 2% to US$2.8bn, compared to the same period a year earlier, PepsiCo said today (22 July).

The soft drinks giant saw its share price rise remain flat at $56 at the beginning of trading on the New York Stock Exchange, after the group reaffirmed its full-year guidance of mid to high single digit growth in sales and earnings per share.

PepsiCo chairwoman and CEO Indra Nooyi said: "Our results this quarter reinforce the advantages of our balanced portfolio, as our food and international businesses delivered solid performance while we continued the transformation of our North American beverage business."

PepsiCo Americas Beverages reported net sales down 7% for the second quarter, on a constant currency basis.

The results, the firm said, reflect the challenging underlying liquid refreshment beverage (LRB) category dynamics, consumer shifts to lower-priced options, an intensely competitive environment as well as deliberate strategic choices.

Gatorade has been particularly hard hit by consumers trading down. "Our goal is to migrate the casual drinker and wellness oriented Gatorade consumers to new offerings in 2010, which we will soon announce," the firm said.

PepsiCo International reported a double digit sales rise, at constant currency, for the second quarter, with drinks volumes in Europe up 2%. 

Looking ahead, Nooyi said: "Across our businesses, we are investing aggressively in R&D to drive innovation to further differentiate our brands; and we believe now is the time to invest in key markets that represent enormous opportunities for years to come."

PepsiCo recently announced plans to invest US$1bn in China over the next four years, and, together with Pepsi Bottling Group, will invest $1bn in Russia over the next three years.