Mondelez Projects Steeper Eps Decline As Third-quarter Volumes Deteriorate

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Mondelez International has pared bets for full-year income maturation and besides projects a steeper diminution successful net per stock amid a driblet successful third-quarter volumes.

While nan Cadbury cocoa shaper reported increases successful nett income for nan 3rd 4th and 9 months of fiscal 2025, volume/mix was down for nan group crossed some those periods and besides successful each geographical business region.

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Mondelez’s shares closed down 2.3% astatine $60.21 arsenic of nan adjacent of trading connected nan Nasdaq speech yesterday (28 October) arsenic it updated nan guidance.

Organic maturation is now projected successful nan 4%-plus area, compared to a erstwhile forecast of astir 5%.

The institution besides anticipates adjusted net per stock will diminution by astir 15% connected a constant-currency ground versus nan anterior estimate for a 10% decrease.

When Mondelez retained its outlook for those metrics astatine nan second-quarter reporting shape successful July, nan Oreo cookies marque proprietor said nan guidance was provided successful nan discourse of “unprecedented cocoa costs inflation”.

The connection utilized successful yesterday’s connection was not truthful specific.

“Outlook is provided successful nan discourse of greater than accustomed volatility, including owed to geopolitical, waste and acquisition and regulatory uncertainty and commodity prices,” Mondelez explained.

However, president and CEO Dirk Van de Put gave immoderate penetration successful his accompanying comments.

“We delivered coagulated top-line maturation contempt nan effect of record-high cocoa costs inflation, pinch nan 3rd 4th representing highest costs of nan year,” van de Put said.

“Although we expect challenging conditions to proceed successful immoderate markets, we are encouraged by caller moderation successful cocoa prices, arsenic good arsenic promising signs for a beardown cocoa harvest this fall.”

The CEO added that his squad is “focused connected executing clear plans for measurement improvement, importantly expanding maturation investments, and driving meaningful costs efficiencies”.

For nan 3rd quarter, Mondelez delivered an adjusted EPS people of $0.73, a diminution of 24.2% from nan corresponding play successful changeless rate terms.

Headline diluted EPS fell 9.5% to $0.57.

Organic nett income grew 3.4% to $9.74bn for nan 3rd 4th and were up 5.9% successful reported terms. Volume/mix, however, dropped 4.6 percent points pinch pricing of 8 percent points.

Of nan 4 reporting regions – North America, Europe, Latam, and Asia, nan Middle East and Africa – nan steepest volume/mix diminution was successful Europe (-7.5%) for nan quarter, acold much than nan 1.8% driblet successful North America.

Pricing successful Europe was 12.6% compared to 1.5% successful North America. Organic maturation successful those 2 regions was 5.1% and minus 0.3%, respectively.

TD Cowen expert Robert Moskow framed his consequence astir a “disappointing reset to earnings”.

Moskow wrote successful a investigation note: “Mondelez 3Q org income of 3.4% missed statement and guidance lowered guidance owed to higher elasticity successful Europe and declining US user confidence.

“In addition, while they proceed to expect a return to precocious single-digit EPS maturation successful 2026, they tamped down investors’ hopes for further upside from falling cocoa costs by emphasising higher finance spending and value rollbacks connected prime cocoa products.”