NEW YORK (AP) — PepsiCo reported stronger-than-expected revenue in the second quarter despite weaker demand in North America, where it said consumers tightened their budgets as the Iran war caused gas prices to spike.

“I think the consumer is worse than what we had anticipated, and it’s driven mainly by gas prices,” PepsiCo CEO Ramon Laguarta said Thursday during a conference call with investors.

PepsiCo’s shares fell 4% in morning trading Thursday.

The food and beverage giant said its net revenue rose 6.4% to $24.2 billion for the April-June period. That was better than the $23.9 billion Wall Street expected, according to analysts polled by FactSet.

PepsiCo began cutting prices on value brands like Santitas last year as U.S. customers grew increasingly exasperated after years of price hikes. In February, ahead of the Super Bowl, PepsiCo slashed U.S. prices on Lay’s, Doritos, Cheetos and Tostitos chips by up to 15%, which boosted snack demand in the first quarter.

But in the second quarter, as gas prices rose, PepsiCo’s snack sales volumes were flat in North America, while its beverage volumes fell 4%. Laguarta said impulse purchases at gas stations and convenience stores were particularly hard hit.

Laguarta said the company is working with those stores to entice customers with more affordable pack sizes and meal bundles.