Mondelez Shares Dip on Lower Revenue Growth Forecast

CHICAGO – Mondelez (NASDAQ:) International, Inc. (NASDAQ:MDLZ) reported a solid first quarter with earnings surpassing analyst expectations, but shares fell 1.5% as the company guided for lower net revenue growth. The snack food giant posted adjusted earnings per share (EPS) of $0.95 for the quarter, $0.06 higher than the consensus estimate of $0.89. Revenue reached $9.29 billion, also exceeding the $9.17 billion forecast by analysts.

Despite the positive earnings beat, the company’s outlook for 2024 indicates a cautious stance amid a volatile geopolitical landscape. Mondelez expects Organic Net Revenue growth of 3 to 5 percent and high single-digit adjusted EPS growth on a constant currency basis, considering the 2023 adjusted EPS including the developed market gum business. However, currency translation is projected to decrease net revenue growth by approximately 1.5 percent, with a potential negative impact of $0.10 on adjusted EPS.

The first quarter’s performance highlighted a 1.4% increase in net revenues, driven by a 4.2% growth in Organic Net Revenue. However, this was partially offset by volume/mix declines of 2.1%. The company’s robust pricing execution and cost management strategies contributed to the revenue growth, alongside momentum in emerging markets.

Gross profit surged by $1.3 billion, with the gross profit margin expanding by 13.5 percentage points to 51.1%. This increase was primarily due to favorable mark-to-market impacts from derivatives and an uptick in Adjusted Gross Profit margin, which rose by 240 basis points to 39.2% on a constant currency basis. Operating income saw an 81.2% jump, reaching $2.7 billion, with the operating income margin at 29.4%.

Diluted EPS, however, declined by 31.6% to $1.04, largely due to a non-cash impairment charge on the company’s JDEP equity method investment in 2024 and other factors such as the divestiture of the developed market gum business in 2023.

Dirk Van de Put, Chair and Chief Executive Officer, attributed the quarter’s strong results to effective pricing and cost management, as well as growth in emerging markets. He emphasized the company’s agility in navigating a challenging operating environment and its focus on long-term growth strategies.

Mondelez returned $1.1 billion to shareholders through cash dividends and share repurchases in the quarter. For the full year 2024, the company anticipates a Free Cash Flow of over $3.5 billion.

Investors reacted cautiously to the mixed signals of a strong past quarter but a conservative outlook, reflected in the slight decline in the company’s stock price following the earnings release.

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