NEW YORK (REUTERS) - PepsiCo's focus on snacks is paying off.

Sales at its Frito-Lay snacks division that makes Doritos tortilla chips and Cheetos grew for the second straight quarter. To overcome sluggish sales of beverages, PepsiCo has been ramping up its snacks business with new flavours and attractive packaging.

Sales of beverages fell in North America but beat expectations. To stem the slide, PepsiCo has been boosting healthier options to sodas.

Its flavoured sparkling water, Bubly, has grabbed more than four per cent share of the sparkling water market just months after it debuted. Wells Fargo analyst Bonnie Herzog said, "We've been encouraged by PepsiCo's early success with Bubly."

Quarterly profit fell due to higher costs for transportation and raw materials. But it, along with rising revenue, beat Wall Street's forecasts.

PepsiCo shares rallied at the start of trading on Tuesday (July 10).