Mondelez 2025 Q1 Earnings Misses Targets as Net Income Plunges 71%

Mondelez International (MDLZ) reported its fiscal Q1 2025 earnings on April 29th, revealing a slight 0.2% increase in total revenue to $9.31 billion, but a significant drop in net income to $407 million, marking a 71.3% decline from the previous year. The company missed analysts' expectations, which predicted earnings of $0.66 per share. Despite the challenging environment, Mondelez maintained its full-year guidance. Their strategic execution was strong amidst unprecedented cocoa cost inflation, and they remain confident in their outlook, focusing on sustainable shareholder value.

Revenue
Mondelez International's revenue for Q1 2025 reached $9.31 billion, marking a 0.2% increase from the previous year. The Biscuits & Baked Snacks segment led with $4.33 billion, followed closely by the Chocolate division at $3.18 billion. Gum & Candy contributed $970 million, Beverages added $297 million, and Cheese & Grocery segments brought in $533 million. These figures collectively bolstered Mondelez's net revenue performance.

Earnings/Net Income
Mondelez's earnings per share (EPS) fell sharply by 70.5% to $0.31 in Q1 2025 from $1.05 in Q1 2024, with net income plunging to $407 million, a 71.3% decrease. This decline reflects the severe impact of cocoa cost inflation on profitability.

Post-Earnings Price Action Review
Following the earnings report, Mondelez's stock exhibited mixed performance. Historical backtest results indicate that the stock typically sees a moderate response to earnings releases, with a 60% win rate observed over a three-day period post-release, a 50% win rate over ten days, and a similar 50% rate over thirty days. The maximum return noted was 1.57% over a thirty-day span, suggesting potential for short-term gains, though overall returns remain subdued. This muted performance may be attributed to the significant decline in net income and EPS, overshadowing slight revenue growth, as investors weigh the company's ability to navigate ongoing commodity inflation challenges.

CEO Commentary
"We delivered solid Q1 2025 results in line with our expectations, driven by strong execution of our growth strategy while navigating unprecedented cocoa cost inflation," said Dirk Van de Put, Chair and Chief Executive Officer. He highlighted that Q1 pricing and share performance, along with the global strength of their categories, provide continued confidence in their full-year outlook. Van de Put emphasized the company's commitment to delivering against their strategic agenda and staying agile in a volatile operating environment to drive sustainable shareholder value.

Guidance
Mondelēz International expects to continue navigating challenges related to commodity cost inflation while maintaining confidence in its full-year outlook. The company remains focused on executing its growth strategy, leveraging pricing power, and improving market positioning to drive sustainable value. Specific quantitative guidance for the full year has not been detailed in the provided text, but the overall tone suggests a cautiously optimistic outlook amid ongoing volatility.

Additional News
In non-earnings-related news, Mondelez International has authorized a significant new share repurchase program, amounting to $9 billion, set to run from 2025 to 2027. This move underscores the company's commitment to returning capital to shareholders. Additionally, Mondelez continues to make strides in sustainability, achieving 90% cocoa volume sourced through its Cocoa Life program, and reducing carbon emissions by 38% since 2018. The company also faces potential headwinds due to new executive orders imposing tariffs on US imports from Mexico and Canada, which could impact future profitability. These developments highlight Mondelez's strategic focus on maintaining shareholder value amidst market challenges.