MDLZ
T3Mondelez International, Inc.
Back to School '25: Value Retailers & College Move-InGLP-1 Short '24: Unhealthy FoodPackaged Foods '26: Sweets, Bakery & Confection
OverviewMondelez International, Inc. is a global snack and beverage company, offering popular biscuits (~40% of sales), chocolates (~35%), gum, candy, and powdered beve
Mondelez International, Inc. manufactures and markets snack food and beverage products globally. Its portfolio, with biscuits representing nearly half of sales and chocolate about a third, includes iconic brands like Oreo, Cadbury, and Milka. These products are sold to various retail food outlets across Latin America, North America, Asia, the Middle East, Africa, and Europe.
Bull / Bear DetailsMondelez shows improving performance in developed markets and sustained strength in emerging markets, supported by strategic brand investments and innovation. H
Thesis
Mondelez shows improving performance in developed markets and sustained strength in emerging markets, supported by strategic brand investments and innovation. However, persistent low consumer confidence, new geopolitical cost headwinds, and the broader, unaddressed long-term threat of GLP-1 drugs to "unhealthy" snack consumption create significant uncertainty. Despite operational improvements, the bear case remains more compelling as of 2026-07-15, driven by macro pressures and structural shifts in consumer health.
Bull case
Mondelez is demonstrating improving performance in developed markets, with Europe showing stable consumer confidence and strong Easter sales, and North America exhibiting positive net revenue growth in Q1 driven by share gains in crackers and candy, and growth from ventures like Perfect Bar and Hu. This indicates effective strategic adjustments and brand reinvestments.
Emerging markets continue to be a robust growth engine, delivering 6.3% growth in Q1, with strong double-digit growth in India and high single-digit growth in Brazil. The company is optimistic about long-term sustainability due to underpenetrated categories, strong reinvestment, distribution expansion, and successful global brand building initiatives like the Biscoff partnership.
Strategic innovation and supply chain modernization are driving future growth and efficiency. Mondelez is accelerating well-being offerings, expanding in cakes and pastries, developing premium indulgent chocolates, and leveraging the Biscoff partnership. A multi-year supply chain program in North America aims to improve productivity, reduce waste, and enhance flexibility through automation and in-house manufacturing.
Bear case
Consumer confidence remains low and fragile in key developed markets like the U.S. and Europe, exacerbated by the Middle East conflict, leading to persistent affordability concerns and subdued snacking categories. The U.S. biscuit category remains flattish, and the overall shopping basket value has not increased in three years, indicating continued pressure on discretionary spending.
Mondelez faces ongoing short-term margin headwinds and increased operational costs. Despite a strong Q1, full-year guidance was only reaffirmed due to unforeseen expenses stemming from the Middle East crisis, including alternative routes for production and delivery, and impacts from oil costs. This indicates that geopolitical factors are introducing new, material cost pressures.
The broader industry faces a structural long-term threat from the increasing adoption of GLP-1 weight-loss drugs, which are fundamentally shifting consumer behavior towards reduced appetite and healthier choices. While Mondelez projects a negligible impact, the widespread concern across the "unhealthy food" sector suggests a potential for long-term volume erosion not fully captured in current outlooks.
Bull / Bear Case
- Bear Case
- Mondelez faces significant near-term headwinds, particularly in North America, characterized by near-historic low consumer confidence and affordability concerns, with the biscuit category remaining subdued and expected to stay soft through the first half of 2026. European chocolate markets, especially in Northern Europe, exhibited higher-than-expected price elasticity in 2025, necessitating price and PPA adjustments in 2026. The sudden and significant decline in cocoa prices creates short-term pressure for Mondelez due to higher-priced coverage for 2026 and risks unexpected competitive reactions, further complicating the market. The company projects a decline in EPS and a 60 basis points contraction in gross margins for fiscal year 2026, driven by EBIT margin deterioration in Europe and North America, alongside expected volume declines.
- Bull Case
- Mondelez anticipates a significant uplift in chocolate margins in 2027 as cocoa prices normalize to historic levels, enabling substantial reinvestment in working media and brand building. This increased investment, planned for both 2026 and 2027, aims to drive volume growth and market share, particularly in developed markets where consumption frequency has been affected. Emerging markets are expected to continue their strong growth trajectory, potentially exceeding current guidance, with a greater contribution from volume and mix in 2026. Additionally, Mondelez is strategically expanding its presence in under-indexed channels like value, club, and online, and pushing premium offerings, which are experiencing double-digit growth, to capture new consumer segments. The company's internal modeling suggests a negligible long-term impact from GLP-1 drugs on its overall volumes, mitigating a major industry-wide concern.
- More Compelling & Why
- Bear. MDLZ's TTM P/E ratio of approximately 29.7-30.35 is 22-33% above its 10-year median, suggesting an elevated valuation. The strongest argument for the bear case is the projected decline in EPS and gross margin contraction for fiscal year 2026, coupled with a high dividend payout ratio exceeding 100%, indicating dividends are not fully covered by earnings. This suggests the current valuation does not adequately reflect near-term operational headwinds. My view would flip if Mondelez demonstrates consistent volume growth reacceleration in developed markets (North America and Northern Europe) in the first half of 2026, alongside a more favorable competitive pricing environment in European chocolate.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| North American Biscuit Volume Decline Persists/Worsens | The North American biscuit category is a significant revenue driver for Mondelez, but it faces subdued consumer confidence and affordability concerns. While management anticipates a volume and revenue inflection in H2 2026, a failure to achieve this or a worsening of declines would signal ineffective strategies and continued pressure on regional performance. | Mondelez's reported organic volume growth for North America, specifically the biscuit category, in Q2 and Q3 2026 earnings. Look for a continuation of volume declines (e.g., >2% year-over-year) and a lack of sequential improvement in the second half of 2026. | Bearish if North American biscuit volumes decline by more than 2% year-over-year in Q2 2026 and show no sequential improvement in Q3 2026, or if management revises its H2 inflection outlook downwards. | Mondelez International Q2 and Q3 2026 earnings reports (July 28, 2026, and October/November 2026), investor presentations, and management commentary. | NielsenIQ/IRI (publicly available reports): US biscuit category sales trends. Google Trends: 'Oreo sales,' 'Ritz crackers sales' (for brand-specific sentiment and search volume). | IRI/NielsenIQ/Circana: CPG Sales Data for North American biscuits (weekly/monthly). Consumer Edge: Credit Card Transaction Data for grocery spending on snack categories. |
| Sustained High or Rising Cocoa Prices Impacting Future Margins | Mondelez's 2026 cocoa coverage was at higher costs than early 2026 spot prices, and management expected prices around $2,500/MT. Current cocoa prices are significantly higher (~$5,700/MT). Sustained high or rising prices will lead to increased input costs for unhedged future positions (2027 onwards), limiting margin expansion and potentially pressuring profitability. | Cocoa futures prices (e.g., September 2026, December 2026, and 2027 contracts) on ICE New York and London. Monitor for prices remaining significantly above $4,000/MT or continuing to trend upwards. | Bearish if cocoa futures (e.g., 2027 contracts) remain significantly above Luca's $2,500/MT estimate (e.g., >$4,000/MT) or continue to rise, indicating sustained high input costs for MDLZ's unhedged future positions and potential margin compression. | Intercontinental Exchange (ICE) website for cocoa futures data (daily). Trading Economics for cocoa price forecasts and historical data (daily). Mondelez International Q2 and Q3 2026 earnings reports (July 28, 2026, and October/November 2026) for management commentary on commodity outlook and hedging. | TradingView: Cocoa futures charts and technical analysis. Public commodity news outlets for market sentiment and supply/demand updates. | S&P Global Platts: Real-time commodity price data for cocoa. Bloomberg Terminal: Futures contracts and market analysis for soft commodities. |
| Escalation of Middle East Conflict Leading to Increased Supply Chain Costs | The Middle East conflict has already introduced unforeseen extra costs for alternative routes and impacted oil prices, leading Mondelez to reaffirm guidance despite a strong Q1. Further escalation or prolonged disruption would exacerbate these cost headwinds, directly pressuring gross margins and EPS. | Management commentary in Q2 and Q3 2026 earnings regarding 'extra costs' related to the Middle East crisis, specifically impacts on logistics, energy (oil), fertilizers, and packaging. Monitor for any upward revisions to cost outlook or further guidance reaffirmations/cuts due to these geopolitical factors. | Bearish if management reports a material increase in Middle East-related 'extra costs' (e.g., >$50M quarter-over-quarter) or if the conflict leads to a downward revision of full-year EPS guidance in Q2 or Q3 2026. | Mondelez International Q2 and Q3 2026 earnings reports (July 28, 2026, and October/November 2026), investor presentations, and management commentary. Geopolitical news sources for updates on the Middle East conflict. | EIA.gov: Global crude oil prices (e.g., Brent Crude). Freightos Baltic Index (FBX): Global container freight rates. | S&P Global Platts: Commodity price data for oil, packaging materials. Supply chain intelligence platforms (e.g., FourKites, Project44): Real-time logistics and shipping cost data. |
| Faster-than-expected GLP-1 Drug Adoption and Impact on Snacking Volumes | Mondelez's internal models project a negligible long-term impact from GLP-1 drugs. Faster-than-expected adoption or a more pronounced effect on calorie reduction would fundamentally challenge this assumption, leading to significant downside risk for 'unhealthy' snacking volumes. Current adoption rates are already within MDLZ's 10-year projection, making the actual volume impact critical. | Quarterly reports from major GLP-1 drug manufacturers (e.g., Novo Nordisk, Eli Lilly) on prescription volumes and patient uptake, especially for oral formulations. Monitor consumer health surveys for changes in dietary habits and calorie reduction. | Bearish if GLP-1 prescription growth rates (YoY) for weight loss indications exceed 50% in Q2/Q3 2026, or if new data suggests a higher average calorie reduction per user (e.g., >2%) than currently estimated by MDLZ, leading to a more material impact on snacking volumes. | Company earnings calls and press releases from Novo Nordisk, Eli Lilly (e.g., Q2 2026 earnings in July/August 2026). Gallup National Health and Well-Being Index (e.g., July 2026 report). | Google Trends: 'Ozempic weight loss,' 'Wegovy diet changes,' 'GLP-1 food cravings.' Reddit forums: r/Ozempic, r/Wegovy for user experiences on appetite changes and food preferences. | IQVIA/Symphony Health: GLP-1 Prescription Volume Data (weekly/monthly). Facteus/Earnest Research: Credit Card Transaction Data (Foodservice & CPG) for spending on snack categories. |
| Failure of Increased Brand Investments to Drive Developed Market Volume Improvement | Mondelez is significantly increasing brand investments in developed markets (Europe, North America) to drive volume growth and market share. If these investments do not translate into tangible volume improvement by mid-2026, it signals inefficient capital allocation and a failure to address underlying demand weaknesses, leading to a bearish outlook. | Mondelez's reported consolidated organic volume growth and regional volume trends for developed markets (Europe, North America) in Q2 and Q3 2026 earnings. Specifically, look for a lack of sequential improvement in volume trends despite increased Advertising & Consumer (A&C) spending. | Bearish if consolidated organic volume growth remains below 1% year-over-year in Q2 2026 and shows no acceleration in Q3 2026, or if developed market volumes continue to decline despite increased A&C spending. | Mondelez International Q2 and Q3 2026 earnings reports (July 28, 2026, and October/November 2026), investor presentations, and management commentary on A&C effectiveness. | Google Trends: Search interest for key Mondelez brands (e.g., 'Oreo,' 'Cadbury,' 'Milka') in developed markets. Retailer promotional activity tracking (e.g., via public news or retail websites). | NielsenIQ/IRI/Circana: Market share data for key categories (biscuits, chocolate) in developed markets. AdIntel: Advertising spend tracking for Mondelez and competitors. |
Key Reported Metrics, Reratings Triggers & ResultsEmerging markets are a key growth engine for Mondelez, expected to offset softness in developed markets. Strong performance here is crucial for overall revenue
| Key reported metrics | Rerating thresholds | ||||
|---|---|---|---|---|---|
| Metric | Last period | Why it matters | What's needed for rerating | Rerating context | Earnings date |
| Emerging Markets Organic Net Revenue Growth | 6.3% | Emerging markets are a key growth engine for Mondelez, expected to offset softness in developed markets. Strong performance here is crucial for overall revenue and volume expansion, indicating the success of their localized strategies. | For a lower rerating (bearish confirmation), Mondelez International's Emerging Markets Organic Net Revenue Growth needs to be below 8%. A continuation of the current 6.3% or a decline from this level would indicate a failure to accelerate towards the company's long-term 9% CAGR target for emerging markets. | Failure to achieve an acceleration in Emerging Markets Organic Net Revenue Growth to 8% or higher would signal that Mondelez's primary growth engine is underperforming, failing to offset softness in developed markets. This would indicate that localized strategies are not as effective and sustained volume expansion is not materializing, thereby undermining future revenue potential and justifying a lower valuation, aligning with the short thesis. | |
| North America Biscuit Volume/Mix Growth | 0.6% | The North American biscuit category faces subdued volumes due to low consumer confidence and affordability concerns. Any improvement or stabilization in this metric would signal effective strategies to drive consumption in a critical market. | North American biscuit volumes decline by more than 2% year-over-year in Q2 2026, or if management revises its H2 inflection outlook downwards. | A decline exceeding 2% would signal a failure of Mondelez's strategies to drive consumption in a critical market, validating the bear case of persistent low consumer confidence and a soft biscuit category. This would contradict management's anticipated H2 inflection, strengthening the short thesis amidst broader structural threats like GLP-1 drugs. | |
| Organic Net Revenue Growth | 3.0% | This metric reflects the company's underlying sales performance, excluding currency fluctuations and acquisitions. Investors will closely watch if Mondelez can maintain positive growth amidst challenging market conditions and achieve its 2026 guidance. | Consolidated Organic Net Revenue Growth below 0%. | A negative growth rate would signal significant deterioration in underlying sales, validating concerns about persistent consumer weakness and geopolitical headwinds. This would likely lead to downward revisions in future earnings estimates and a compression of the stock's elevated valuation, confirming the bearish thesis. | |
Key QuestionsWill competitive pricing actions in European chocolate, driven by the recent cocoa price decline, lead to greater-than-expected market share losses or margin pr
Will competitive pricing actions in European chocolate, driven by the recent cocoa price decline, lead to greater-than-expected market share losses or margin pressure for Mondelez in Q1 2026?
- Question 2
Will Mondelez's North American biscuit volumes continue to decline in Q1 2026, indicating a failure of its current strategy to address weak consumer confidence and value-seeking behavior, especially compared to competitors' pricing actions?
- Question 3
Will the accelerating adoption of GLP-1 drugs, particularly oral formulations, show a more immediate and material negative impact on Mondelez's snacking volumes in Q1 2026 than the company's current 'negligible' long-term estimates?
Earnings Transcript Summary
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **Improving performance in developed markets**: Management is pleased with improving performance in developed markets, particularly in Europe with stable consumer confidence, a robust Easter season, and the Biscoff partnership doing well. In the U.S., they are focused on gradual improvement through increased brand reinvestments, sharpened PPA, growth channels, and new innovations. 2. **Sustaining strong growth in emerging markets**: Emerging markets remain a key focus, showing very strong performance with 6.3% growth in Q1. Management is optimistic about long-term sustainability due to underpenetrated categories, strong reinvestment, distribution expansion, global brand building, and RGM opportunities. 3. **Strategic reinvestment and operational efficiency**: Despite reaffirming guidance due to Middle East headwinds, management is focused on investing back into the business, particularly in A&C, to continue momentum and drive strong EPS growth in 2027. They are also modernizing the North American supply chain to improve productivity, reduce waste, and enhance flexibility for different pack sizes and distribution. | The overall takeaway of the call is one of **cautious optimism**. Management reported a strong start to the year, particularly in emerging markets and with improving trends in developed markets. However, they maintained a cautious tone regarding the full-year outlook, reaffirming guidance due to unforeseen headwinds from the Middle East conflict and a strategic decision to reinvest potential upside back into the business for future growth. The tone was **transparent** about challenges but **confident** in their long-term strategy, innovation pipeline, and operational improvements, especially looking towards 2027. | In Q3 2025, Emerging Markets Organic Net Revenue grew +7.1%. Europe Organic Net Revenue grew +5.1%. North America Organic Net Revenue declined -0.3%. Latin America Organic Net Revenue, which includes Brazil and Mexico, grew +4.7%. Asia, Middle East & Africa (AMEA) Organic Net Revenue, which includes China and India, grew +5.3%. | 1. **Reaffirming guidance despite strong Q1 and reinvestment plans**: Analysts questioned why guidance was only reaffirmed given a strong Q1 start. Management responded that while they were ahead of expectations, they needed to account for headwinds from the Middle East crisis (extra costs, oil impact) and chose to confirm guidance. They indicated that any EPS upside would likely be reinvested to build momentum for strong 2027 EPS growth. 2. **Competitive environment in Europe and cocoa market dynamics**: Analysts asked about the competitive landscape in Europe given cocoa volatility and the outlook for the rest of the year, as well as management's assessment of the cocoa market. Management stated that things are going well in Europe, customer negotiations are largely complete, and they don't see immediate price movements. Regarding cocoa, they believe fundamentals haven't changed, with 2,500 being a fair representation of prices, and potentially lower levels ahead, despite the industry having gone longer on coverage. 3. **North American consumer and business outlook**: Analysts sought to reconcile management's expectation of a weakening U.S. consumer with the anticipated improvement in the North American business. Management explained that while consumer confidence remains low and snacking categories are soft, their North American business is expected to see a volume and revenue inflection in the second half of the year. This improvement is driven by share gains in savory (Ritz), strong performance in candy (Sour Patch Kids), effective execution in growing channels (Club, value), and growth from ventures like Tate's and Clif bars. | Emerging Markets grew 6.3%. Emerging Markets volume mix was up 0.5%, or almost 1% excluding Argentina. China saw mid-single digit growth, with the Evirth acquisition growing high single-digit. India experienced strong double-digit growth in chocolate and biscuits. Brazil had high single digit growth. Mexico was flat. North America reported slightly positive net revenue growth. Europe's organic sales were down only 0.5% or so. The Sour Patch Kids brand is expected to grow double digit for the year. The [Ritz] bar continues to grow close to double digits. Canada had a terrific Q1. |
· 2025Q4 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **Adjusting Chocolate Strategy and Increasing Brand Investments**: Management is focused on adapting their chocolate strategy in response to the precipitous fall in cocoa prices, which occurred unexpectedly. They plan to increase investments behind brands, adjust price pack architecture (PPA), and push innovation (e.g., Biscoff collaboration) to regain consumption frequency and quantity, especially in Europe where elasticity was higher than expected. 2. **Driving Volume Trajectory Improvement, especially in Emerging Markets**: The company aims for significant volume trajectory improvement throughout 2026, with a particular focus on emerging markets like AMEA and Latin America, which are expected to be key sources of growth. This involves increased investments and leveraging PPA to address affordability and drive consumption. 3. **Optimizing North American Performance and Supply Chain Efficiency**: Management is focused on adapting to the soft consumer confidence and declining biscuit category in North America. Their strategy includes investing more to drive awareness, using PPA for affordability, expanding into value, club, and online channels, pushing premium offerings, and activating a multi-year supply chain program to modernize operations, improve efficiency, and reduce costs. | The overall takeaway of the call is one of **cautious optimism and strategic adaptation**. Management acknowledged a challenging operating environment, particularly due to the unexpected and precipitous fall in cocoa prices, which creates short-term pressures and competitive uncertainty for 2026. However, they expressed confidence in their long-term strategy, emphasizing significant planned investments in brands, PPA adjustments, and supply chain modernization to drive volume growth and market share. The tone was **transparent** about the headwinds, especially in developed markets and the North American biscuit category, but also **resolute** in their plans to navigate these challenges and position the company for stronger profitability and volume growth in 2027 and beyond, particularly in chocolate and emerging markets. | Mondelez International (Consolidated Organic Net Revenue): +3.4% in Q3 2025. Latin America (Organic Net Revenue): +4.7% in Q3 2025. Asia, Middle East & Africa (AMEA) (Organic Net Revenue): +5.3% in Q3 2025. Europe (Organic Net Revenue): +5.1% in Q3 2025. North America (Organic Net Revenue): -0.3% in Q3 2025. Emerging Markets (Organic Net Revenue): +7.1% in Q3 2025. Developed Markets (Organic Net Revenue): +1.2% in Q3 2025. | 1. **Cocoa Price Volatility and Chocolate Strategy**: Analysts questioned how the sudden fall in cocoa prices would impact Mondelez's chocolate strategy and 2026 outlook, given their 2026 coverage at higher prices. Management responded by stating they are building flexibility into their guidance, increasing brand investments, adjusting PPA, and focusing on 2027 for significant margin improvement as cocoa prices normalize. They also noted potential short-term competitive reactions. 2. **North American Market Dynamics and Pricing Strategy**: Analysts pressed on the difficult operating environment in North America, weak volume trends, and the company's pricing strategy in light of a competitor's price cuts. Management explained that consumer confidence is low, impacting snacking categories. They are adapting by investing more in awareness, using PPA for affordability, expanding channels, and pushing premium brands, but do not plan to decrease prices to the magnitude of competitors, having found aggressive promotions in 2025 did not yield returns. 3. **Volume Trajectory Improvement and Investment Levels for 2026/2027**: Analysts sought clarity on where significant volume trajectory improvement would come from in 2026 and the multi-year investment plans. Management indicated volume growth is expected from AMEA and Latin America, with easing declines in Europe and North America. They confirmed a significant step-up in working media investments in 2026 compared to 2025, with further increases planned for 2027 to drive volume growth and leverage improved commodity costs, particularly in cocoa, for strong EPS growth while continuing brand investment. | Emerging Markets: High single-digit growth. Developed Markets: Decline in the low to mid-single-digit range. North America (Biscuits volume): Down 4% in the last three months of 2025. Europe (Chocolate): Mixed performance with higher than expected elasticity in Northern Europe; other categories (biscuits, cakes, pastries, meals) had a pretty good year. AMEA: Expected to be a big source of volume growth. Latin America: Performance masked by Argentina, but Brazil and Mexico are doing quite well. |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Mondelez is expanding its presence in growth channels like value, club, and online, and pushing premium offerings such as Perfect Bar and Hu, which are growing well. The company is seeing strong performance from its Biscoff partnership, with Biscoff biscuits launching successfully in emerging markets and Biscoff-infused chocolate ranges expanding. Innovation efforts include well-being acceleration with protein and fiber products (Perfect Bar, Builders bar, gluten-free, zero added sugar Oreo), cakes and pastries (Milka Croissant, 7Days in Brazil, Oreo cakes in China and U.S.), and premium indulgent chocolate (Toblerone Pralines, Cadbury & More, Milka MAX, Hu vegan chocolate). Mondelez is also innovating in munching and on-the-go snacks with products like Ritz Drizzled and Ritz Bits. The company plans to bring proven volume platforms currently manufactured by co-manufacturers in-house and invest in packaging capabilities for specific pack sizes like multipacks to compete in various channels. | The competitive environment in Europe has calmed down, with no significant price movements observed, as the industry awaits clarity on cocoa prices in the second half of the year. Mondelez's chocolate business in Europe is off to a good start, and its share trends are improving, with the base business turning from a share loss to slightly positive over the last month. In the U.S., Mondelez is gaining share in crackers, particularly through Ritz, and its Sour Patch Kids brand is expected to grow double-digit for the year. The company is pursuing a share gain plan in North America, as it does not anticipate significant category improvement. Tate's and Clif bars are also gaining share. | Consumer confidence in Europe is stable but fragile due while U.S. consumer confidence remains low and is expected to deteriorate further, with concerns about affordability, economic outlook, and job security. Snacking categories generally remain resilient across emerging markets, with strong value growth, especially in biscuits and chocolates. In the U.S., the biscuit category value is flattish, with growth primarily in value club channels and better-for-you and premium segments. The Middle East crisis is causing extra costs for the industry due to alternative routes for production and delivery, and oil costs are impacting profitability. Cocoa prices, after falling earlier in the year, have stabilized around $2,500, which is considered a fair representation of supply and demand, with expectations of another year of surplus. European cocoa demand is subdued. The Middle East conflict is anticipated to affect energy prices, fertilizers, packaging, and oil prices, potentially leading to increased inflation that consumers will feel. The U.S. shopping basket's dollar value has not increased in three years, despite rising item prices, leading consumers to make more conscious purchasing decisions and shift towards value, club, and online channels. | Mondelez anticipates a gradual improvement in its North American business through increased brand reinvestments, sharpened price pack architecture (PPA), and strong innovations. Emerging markets are expected to continue as a sustainable growth engine, with optimism for long-term growth due to underpenetrated categories, strong reinvestment, distribution runway, and global brand building. The company reaffirmed its full-year EPS guidance, planning to invest any potential EPS upside back into the business to maintain momentum for strong 2027 EPS growth. The European chocolate market is expected to continue strongly through the year. Cocoa prices may see a slightly lower level ahead. The U.S. market is projected to see a volume and revenue inflection in the second half of the year, with North American business turning around positively. Mondelez plans to modernize its supply chain by simplifying lines in some plants, bringing co-manufactured proven volume platforms in-house, investing in packaging flexibility for different pack sizes, and automating its Direct Store Delivery (DSD) network with AI fulfillment centers to reduce stock and costs. | Unhealthy | The Middle East conflict is a broader geopolitical theme impacting global energy prices, inflation, and consumer confidence across various industries. The concept of a 'K-shaped economy' is emerging, where higher-income consumers buy premium products while lower-income consumers focus on lower unit prices and selective buying. Automation and AI are emerging as themes in supply chain management, with Mondelez planning to use AI fulfillment centers to improve efficiency and reduce costs in its DSD network. | We're pleased with our improving performance in the developed markets. We are very pleased with our performance in emerging markets. It remains very strong. We continue to see emerging markets as a sustainable growth engine, and we are quite optimistic for the long term. We feel quite good about the start of the year. We are ahead. We are optimistic about the remainder of the year. We feel good about where the chocolate market is, where the reaction of the clients and the competition has been, and we expect that the year will continue quite strongly. We believe 2,500, which is the level we see at this moment is a much better representation of what supply and demand would say. you're going to see a volume and revenue inflection as we go into the second part of the year in the U.S. We are extremely pleased with the performance of Sour Patch Kids. It is a brand that most likely for the year is going to grow double digit. There are quite a few things that we feel are working well. around about 60% of the network we have in the U.S. is really state-of-the-art. | consumer confidence there is stable, but it's fragile as you would expect from the Middle East conflict. The U.S., the consumer confidence there remains quite low. We expect it to further deteriorate as the Middle East conflict continues. the consumer remains very concerned about affordability, economic outlook and job security. Oreo was a little bit less, but we had a limited time offer this year that didn't perform as well as last year's. the only place where the consumer is softer is in China. Mexico was flat in Q1. we need also to address some headwinds that we didn't have in our original forecast, particularly as they stem out of the Middle East crisis. the oil cost albeit we are covered for the year is having a little bit of an impact on the profitability. At this point in time, to be able to swallow it, we had to confirm guidance on the bottom line. demand of cocoa is quite subdued. the Middle East conflict will affect energy prices, which are very sensitive in Europe. consumption in the U.S. for a number of reasons will remain subdued in general. Most food categories and snacking categories remain soft in general. the shopping basket, which has not increased in dollar value for 3 years now. some plants in the U.S. still run on high waste, still run on the level of productivity that is below expectations. | Mondelez plans to automate its Direct Store Delivery (DSD) network by creating automation and AI fulfillment centers, which will enable them to reach points of sale faster and reduce stock and costs in those branches. This implies potential changes in workforce roles or efficiency gains through AI and automation. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Mondelez is expanding in channels like value, club, and online where it is currently under-indexed, aiming to push harder and increase market share. The company sees plenty of opportunities to grow its chocolate business in Europe, even after significant price increases in 2025, by leveraging price points, channels, and segments. They also plan to invest in advertising and consumer (A&C) spending to expand in both developed and developing parts of Europe. | The recent and sudden decline in cocoa prices could lead to unexpected competitive reactions in the market, especially since major players have already covered 2026 at higher prices. The company's guidance range for 2026 incorporates flexibility depending on how competitors react to these new cocoa prices. In North America, Mondelez does not believe it needs to decrease prices to the magnitude observed from another company in the snacking category. Potential competitive reactions are also a key milestone the company will be watching for in European chocolate. | The global chocolate market demonstrated resilience in 2025 despite volatility and significant price increases. In North America, consumer confidence is near historic lows, with consumers worried about affordability and price increases, leading to a shift in spending towards basics like milk, meat, and bread, which has negatively affected snacking categories. The biscuit category in the US remains subdued, with volumes down 4% in the last three months of 2025 and 3% for the full year, and is expected to remain soft in the first half of 2026. | Mondelez anticipates its chocolate business margins will increase considerably in 2027, benefiting from cocoa prices returning to historic levels. The company aims for improved volume trajectory, particularly as 2026 progresses, through substantial brand investments. Emerging markets are expected to continue growing, potentially exceeding current guidance, with less contribution from pricing and more from volume mix in 2026. For 2027, Mondelez plans another step up in brand investments to drive volume growth, which is seen as the primary basis for company growth. The goal for European chocolate is to return to pre-2025 profit levels, or even better, by 2027, with 2026 serving as a new base and 2027 being a potential 'step change'. | Unhealthy | Mondelez is investing in and supporting the development of lab-grown cocoa, which is not GMO, as a direction for the future. This is driven by the potential for significant benefits in addressing climate and social issues associated with the traditional cocoa supply chain, with anticipated interest from European and US governments for approval. | The overall chocolate market in the world, it has shown a lot of resilience. Cocoa now has returned to a level that is much more in line with the historic price that we've seen. And that bodes very well for 2027. We see our chocolate business in 2027 increase its margin in a considerable way. The emerging markets will continue growing and hopefully they will do even better than what is embedded quite frankly, in the guidance. We are aiming for a strong EPS growth in 2027. | In the more northern markets in Europe, Germany, The Nordics, The UK, we saw higher than expected elasticity so we have to take adjustments in 2026. Suddenly the cocoa price has declined more than anybody would have expected. And this will have some short-term pressures. The biscuits category is still subdued, and, you know, the plan is that it will continue like that for the first half at least. The consumer confidence is near historic low. They're worried about overall affordability. They are fed up with the price increases. |
Notes
| Date | Comment | Comment Type | Comment Sentiment | Link | Price Reaction |
|---|---|---|---|---|---|
| 2026-02-03 | Mondelez's earnings call highlighted prudent 2026 guidance due to short-term cocoa price volatility and North American biscuit softness. The company plans increased brand investment and strategic pricing adjustments in Europe. Despite these near-term pressures, the market reacted positively, with MDLZ outperforming SPY post-earnings, likely due to the long-term positive outlook for chocolate margins in 2027 from lower cocoa costs and a deemed negligible GLP-1 impact. | Earnings Transcript | Neutral | +0.92% (vs SPY: +0.76%) |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| MDLZ_8177191f | in 2026 | 2026-04-24 | 2026-12-31 | Unforeseen competitive reactions to the recent and sudden decline in cocoa prices, potentially leading to unexpected pricing actions in the chocolate market. | This could introduce short-term pressures on Mondelez's chocolate business, impacting pricing power, market share, and profitability in 2026, as MDLZ is covered at higher prices. | Ticker | 2026-02-03 | earnings_transcript |
| MDLZ_155a6cfb | as we move through the year | 2026-04-24 | 2026-12-31 | Mondelez's ability to achieve a significant improvement in volume trajectory across its key regions (AMEA, Latin America, Europe) throughout 2026. | Improved volume growth is crucial for revenue expansion and signals stronger consumer demand, which could positively impact financial results and investor confidence. Failure to deliver could be bearish. | Ticker | 2026-02-03 | earnings_transcript |
| MDLZ_4f39c1cd | in 2027 | 2027-01-01 | 2027-12-31 | Realization of a significant increase in chocolate margins in 2027, primarily driven by lower cocoa costs (assuming current market prices stabilize) and strategic actions. | This margin expansion is expected to be a key driver of future profitability and EPS growth for Mondelez, with the allocation between reinvestment and bottom-line flow impacting overall financial performance and valuation. | Ticker | 2026-02-03 | earnings_transcript |