The company raised prices to offset elevated cocoa costs. (Mondelez via YouTube)
Mondelez International Inc. posted slower-than-expected sales growth as worries about inflation and the economy push U.S. consumers to prioritize essentials over cookies, crackers and sweets.
The owner of the Oreo, Ritz and Cadbury brands said organic revenue, which excludes currency changes and other items, rose 3.1% in the first quarter, short of the 3.5% that analysts had projected. Sales in North America unexpectedly fell while other regions saw gains.
“I really do not expect to see a significant improvement in consumer confidence in the near term in the U.S.,” CEO Dirk Van de Put told analysts on the company’s earnings call.
Mondelez ranks No. 65 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 9 among agriculture and food processing carriers.
Mondelez has been one of the best performing packaged-food stocks this year, with shares up about 10% through April 29.
But President Donald Trump’s trade war has made Americans increasingly pessimistic about prospects for the economy and labor market, and many are curbing their spending as a result. Mondelez said it’s seeing shoppers prioritize meat, vegetables and eggs over more indulgent categories like snacks. Lower-income shoppers are also switching to smaller packages while higher-income consumers opt for larger value packs.
The company raised prices to offset elevated cocoa costs, and that has helped to offset a decline in volumes. As U.S. consumers demonstrate “continued frustration with prices,” the company said it’s launching more affordable products to match what shoppers are now willing to pay.
“Two, three years ago consumers would easily pay above $4 for a pack of biscuits,” Van de Put said. “We’re now seeing that we need to be below $4 and ideally below $3.”
Mondelez reiterated its full-year guidance, including an expectation that profit will fall about 10% this year on a constant currency basis “due to unprecedented cocoa cost inflation.” The company expects earnings per share growth in 2026.
The guidance doesn’t reflect any potential tariff changes related to goods that are compliant with the USMCA trade agreement in North America. The vast majority of Mondelez’s production for the U.S. is either made domestically or compliant with USMCA. A small portion of the company’s finished goods and ingredients are subject to tariffs, which are factored into the earnings guidance.
