The maker of Oreo cookies worsened its outlook due to high cocoa prices. Shares collapsed
Mondelez International, which produces Oreo cookies and Milka chocolate, has worsened its annual revenue and profit forecast. The reason for this was high cocoa prices, Bloomberg writes. Mondelez shares collapsed in extended trading.
Details
Mondelez expects organic revenue growth (standalone, excluding the effect of acquisitions) of at least 4% in 2025, whereas previously it had forecast a rise of about 5%. The forecast for adjusted earnings per share (EPS) is also revised down by 15%, whereas previously Mondelez expected it to fall by 10%.
The revised forecasts show that high cocoa prices continue to put pressure on the business, Bloomberg notes. In order to keep prices down and not scare off customers in the face of growing economic pressure, Mondelez is reducing product volume (so-called shrinkflation): this keeps the cost of some brands below $3-4 per pack, the agency writes.
Mondelez CEO Dirk Van de Put acknowledged the impact of "record high cocoa cost inflation" on the company's third quarter results. "While we expect continued challenging conditions in some markets, we are encouraged by the recent decline in cocoa prices as well as promising signs of a good harvest this fall," Van de Put said, adding that the third quarter was the peak quarter for costs this year.
As reported by Mondelez
Mondelez's third-quarter revenue rose 6% year-on-year to $9.74 billion. Organic sales growth reached 3%. However, adjusted earnings per share fell 24% to $0.73. According to the company, it was higher raw material costs, including cocoa, that had the biggest impact on earnings.
Cocoa futures in October fell to their lowest in 11 months: they lost 50% compared to the record set in December 2024, Bloomberg wrote. Global demand for cocoa beans is expected to remain subdued in late 2025 and early 2026, the agency added.
What about the stock
Mondelez shares fell by about 6% in extended trading on October 28 after the release of its third quarter and full-year forecasts. The main stock exchange session ended with a 2.35% decrease to $56.9.
Mondelez stock was worth just 0.8% more at the close of trading Tuesday than it was at the start of 2025. But most analysts tracking the stock are advising them to buy: they have 14 Buy ratings and five Overweight ("above market") versus 10 Hold (advice to hold), MarketWatch shows. There are no sell recommendations. The average target price of $71.96 implies a price increase of almost 20% more relative to the close of trading on Oct. 28.
This article was AI-translated and verified by a human editor
