Mondelez International, Inc. (MDLZ.US) faced a "cocoa shock" after-hours, and its price strategy may stir up the market in 2026.

Mondelez International's (MDLZ.US) stock price plunged in after-hours trading after the company warned of "unprecedented cocoa cost inflation" that would lead to a decline in 2025 earnings. The company expects adjusted EPS to fall about 10% in 2025, which has raised concerns.

Mondelez's stock price fell as much as 5% in New York after-hours trading. Cocoa prices have surged more than double since the end of 2023. Mondelez International's CEO Dirk Van de Put said the company is focused on addressing cocoa cost inflation in 2025.

Mondelez reported fourth-quarter sales rose 3.1% to $9.6 billion, as of Dec. 31, but adjusted EPS fell 16% to $0.65 in its fourth-quarter earnings report released on Tuesday.

Despite the company's increased revenue from 2023, total volumes fell as consumers shopped less frequently at supermarkets. Mondelez International raised prices due to its reliance on cocoa, which contrasts with other food manufacturers that use promotions to attract customers.

Despite the cost challenge, Mondelez International expects cocoa prices to eventually fall from current highs, but remain above historical levels. The company plans to raise prices further in the second half of 2025 and in 2026. Consumer demand for chocolate remains strong, with the company's Christmas net income growing double digits.

Chief Financial Officer Luca Zaramella said the company expects EPS to grow in 2026 regardless of cocoa price changes.