Mondelez, the maker of Cadbury, raises annual forecasts due to high demand.

Mondelez, the maker of Cadbury, raises annual forecasts due to high demand.

Mondelez International Raises Growth Forecasts Amidst Strong Demand for Snacks and Chocolates

Mondelez International, the maker of beloved snacks and chocolates including Oreo and Cadbury, has raised its full-year growth forecasts for the second time this year. This positive outlook comes amidst robust demand and successful price increases, which have helped shield the company’s margins from higher costs of raw materials and transportation.

The news of Mondelez’s improved growth forecasts has been met with enthusiasm by investors, with the company’s shares rising by 2.7% in after-hours trading. The positive quarterly results, which also surpassed analysts’ estimates, further contribute to the optimistic sentiment surrounding the brand.

Mondelez is not alone in leveraging strong consumer demand to increase prices and protect profitability. Other major packaged-food makers such as Hershey, Campbell Soup, General Mills, and Nestle have also implemented price hikes to counter rising costs. This strategic move has proven successful for the industry as a whole.

Edward Jones analyst Brittany Quatrochi highlights the key drivers behind Mondelez’s solid increase in profitability. “Strong sales and better productivity drove a solid increase in profitability,” she explains. This demonstrates the company’s ability to meet consumer demand while effectively managing its resources.

The success of Mondelez and its counterparts in the confectionery industry indicates that consumer spending on favorite cookies, gum, and candy has remained strong. CFO Luca Zaramella mentions the resilience of the consumer market, stating, “Overall, the consumer remains resilient, with elasticities holding up relatively well in chocolate and biscuit.” This suggests that indulgent treats continue to be a priority for consumers, even in challenging economic times.

• Intel predicts higher-than-expected Q3 profit.
• Dow Jones index to end 13-day winning streak
• German new building starts plummet, indicating property stress

Mondelez has experienced double-digit organic revenue growth across various regions, including Europe, Latin America, and North America. The company’s margins have also seen improvement during the quarter. Executives express their satisfaction with Mondelez’s performance in China, particularly in the gum segment, asserting that they are “very encouraged by our China business.”

However, Mondelez faced volume decline in Europe as it concluded price negotiations with retailers, in line with expectations. CEO Dirk Van de Put acknowledges this decline and shares the company’s optimism for the future, stating, “Now that pricing is 100% secured, we expect volume and revenue growth, as well as margin improvement for Europe.” Mondelez plans to capitalize on the secure pricing structure to achieve growth in the European market.

As a testament to its commitment to focus on its core business, Mondelez has sold its remaining stake in Keurig Dr Pepper. The sale generated proceeds of $704 million, reinforcing the company’s dedication to its snacks and chocolates business. This strategic move allows Mondelez to allocate resources and attention to its key brands and market segments.

With the positive trajectory seen in the second quarter, Mondelez now expects full-year organic net revenue and adjusted per-share profit growth of more than 12%. This outlook represents an increase compared to the previous projection of a 10% growth. The revised forecasts indicate Mondelez’s confidence in its ability to continue meeting consumer demand and driving profitability.

Overall, Mondelez International’s exceptional performance in the confectionery industry signifies the success of its pricing strategy and the strong desire consumers have for their products. The company’s resilience, buoyed by robust demand, highlights its ability to adapt and thrive amidst challenging economic conditions. With its increased growth forecasts, Mondelez sets a positive tone for the future, reinforcing its position as a leader in the global snacks and chocolates market.

• AMERS
• BACT
• BIZ
• BLR
• CHOCS
• CMPNY
• EUROP
• FIN
• FINS
• FINS08
• FOBE
• FOD
• FODPR
• FODPR1
• FOOOTH
• FOTB
• GB
• HLDG
• HLDG1
• HOT
• HSEHLD
• HSEPR
• INVT08
• NAMER
• NCYC
• PRIVT
• PSNPR
• PUBL
• RES
• RESF
• SNACKS
• STX
• TOPCMB
• TOPNWS
• US
• WEU