Mondelēz Anticipates Weak 2025 Earnings Amid ‘Unprecedented’ Cocoa Costs

Mondelēz International warned shareholders of a not-so-sweet 2025 fueled by “unprecedented cocoa cost inflation” while posting mixed Q4 2024 results in its earnings report yesterday.

In the quarter ending December 31, the Oreo and Ritz maker missed analyst estimates after reporting a net revenue increase of 3.1% and organic net revenue growth of 5.2% in the fourth quarter, primarily fueled by higher net pricing and favorable volume/mix. Adjusted EPS was down 15.9% to $0.65.

For the full year, Mondelēz saw net revenues rise 1.2% and organic net revenue grow 4.3%, driven by higher net pricing and partially offset by unfavorable volume/mix.

“Fiscal 2024 was another strong year of performance for our company. We delivered balanced top-line growth, strong earnings, and robust cash flow generation while returning significant capital to shareholders,” said Dirk Van de Put, chair and CEO, in a prepared statement. “Our teams are agile […] and we believe we are solidly positioned for attractive long-term top- and bottom-line growth.”

North American consumers continued to prioritize Mondelēz’s brands in Q4 despite continuing concerns about the economic outlook, the company claims. According to Van de Put, biscuit category volumes remained relatively flat over the past three months and private label is seeing declines, demonstrating that shoppers “remain loyal to their favorite brands” and that the company’s price-pack architecture initiatives “are showing promising signs.”

Mondelēz’s plans to place a greater focus on price-pack architecture were announced during its Q3 earnings call in October and include smaller sizes of core products in its portfolio. The company made “significant progress” in advancing its revenue growth management (RGM) capabilities in Q4 by launching the $2.99 snack packs and unveiling an array of new chocolate pack sizes at new price points globally.

As a result, Oreo, Chips Ahoy and Ritz brands are regaining shares in North America. Meanwhile, in Europe, consumer confidence and price elasticities remain stable despite the uncertain economic and political environment. Elasticities are also stable in emerging markets like India, Brazil and Mexico, said Van de Put.

Through its Oreo collaboration with rapper Post Malone, slated to drop this week, Mondelēz is seeking to accelerate its digital channels. The company grew its ecommerce business by double digits in 2024 and says it will continue investing in “new capabilities” to become a leader in digital snacking.

“We enter 2025 encouraged by our new price packs, expectations for category growth and new distribution growth,” said Van de Put.

Though the full impact of cocoa supply chain challenges in 2025 is yet to be seen, Mondelēz has undertaken “extensive planning” since last spring and believes it has a “clear and sound strategy” to navigate the conditions. According to CFO Luca Zaramella, this includes a robust RGM playbook, strong marketing and sales execution and targeted cost savings.

Zaramella remained optimistic about the potential turnaround of the cocoa market, saying, “Although we cannot predict specific timing, we continue to believe that the inverted nature of the market combined with lower demand levels due to higher pricing and elasticity will eventually bring cocoa to a more sustainable price level.”

In fiscal 2025, Mondelēz expects organic revenue to grow approximately 5% and adjusted EPS to decline approximately 10% on a constant currency basis due to surging cocoa prices. The outlook does not include the potential impacts of the proposed 25% tariffs on U.S. imports from Mexico and Canada, which Van de Put said would create an “additional headwind” for the business.

“Given the fluid and rapidly changing nature of timing, it is difficult to provide a reliable estimate of impact for the full year at this time. We believe this outlook is a prudent planning stance based on our visibility of cocoa costs in 2025, which is substantially protected and hedged at this point,” Van de Put said during Tuesday’s call.