Mondelez International has cut its full-year outlook as high cocoa prices and cautious consumers weighed on the maker of Oreo cookies and Ritz crackers. The company said shoppers are under pressure and pulling back from snacks as they focus on essential goods.
Chicago-based Mondelez now sees organic sales growth rising 4% or more in 2025, a reduction from previous guidance of an expansion of about 5%. The company also expects earnings per share, excluding some items, to decline by about 15% ¡ª deeper than the 10% decline it previously projected.
Chief Executive Officer Dirk Van de Put said on the company¡¯s call with analysts that consumers are ¡°very concerned in general about the economy.¡± He added they¡¯re ¡°frustrated with the pricing they¡¯re seeing¡± and many are opting to buy essential goods instead of Mondelez¡¯s cookies and other snacks.
Van de Put also noted that the U.S. government shutdown ¡°will not help with the confidence of the consumer.¡±
The company has raised its chocolate prices 30% over multiple years, Van de Put said, and in some cases, ¡°that was probably a little bit more than the consumer can accept at the moment.¡± At the same time, promotions haven¡¯t delivered the boost in volumes the company expected.
Mondelez has started selling smaller package sizes in an effort to keep some of its products below the $3 and $4 price thresholds. Like other packaged-food companies, Mondelez said it has seen growth in its higher-protein offerings such as its Clif Builders protein bars and other better-for-you options, including vegan chocolate.
High cocoa costs continue to squeeze margins, though Mondelez expects conditions to improve in the coming weeks. Cocoa futures have tumbled more than 50% from December¡¯s record high amid forecasts for a supply surplus and soft demand. Weather in West Africa has also appeared to improve from a year earlier, the company said.
Earlier this month, cocoa futures touched their lowest level in 11 months. Global demand is expected to remain subdued into next year.
Shares of Mondelez fell about 5.7% at 6:10 p.m. in postmarket New York trading. The stock has gained 0.8% this year through Tuesday¡¯s close, compared with a 17% increase in the S&P 500 index.
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