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Mondelez International, Inc. MDLZ posted first-quarter 2025 results, with the top line increasing year over year but missing the Zacks Consensus Estimate. On the other hand, the bottom line declined year over year but beat the consensus mark.
The company delivered solid results supported by effective execution of its growth strategy despite record-high cocoa cost inflation. Strong pricing, market share performance and resilient category strength globally reinforce confidence in the full-year outlook.
Adjusted earnings were 74 cents per share, which decreased 18.3% on a constant-currency (cc) basis. The metric beat the Zacks Consensus Estimate of 65 cents. The decline was mainly caused by decreased operating results and elevated interest and other expenses, partially offset by fewer shares outstanding, lower taxes and contributions from the acquisition. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Mondelez International, Inc. Price, Consensus and EPS Surprise
Mondelez International, Inc. price-consensus-eps-surprise-chart | Mondelez International, Inc. Quote
Net revenues increased 0.2% year over year to $9,313 million, missing the Zacks Consensus Estimate of $9,332 million. The year-over-year increase in the top line stemmed from incremental contributions from the Evirth acquisition. These gains were partially offset by negative currency impacts and the comparison to prior-year sales tied to a temporary distributor agreement for the developed market gum business, which was divested in 2023.
MDLZ’s Q1 Revenue and Margin Breakdown: Key Insights
Organic net revenues grew 3.1% year over year in the first quarter. This upside was primarily fueled by a 6.6 percentage point (pp) increase in pricing, partially offset by an unfavorable volume/mix impact of 3.5 pp. Our model estimated organic net revenue growth of 3.1%.
Revenues from emerging markets decreased 0.3% to $3,723 million, but rose 3.9% on an organic basis. The organic growth was backed by favorable pricing actions, which increased 7.6 pp and unfavourable volume/mix was down 3.7 pp. The company saw growth trends across countries like Brazil, China, and most of the Middle East and Africa, although there was some softness in India and Southeast Asia.
Revenues from developed markets increased 0.6% to $5,590 million, with an organic rise of 2.6%. This growth was primarily driven by strong pricing execution, which contributed positively, while the volume/mix effect declined 3.3 pp due to retailer destocking and some elasticity in the chocolate category. Overall, pricing had a favorable impact, contributing 5.9 pp.
Region-wise, revenues in Latin America and North America declined 8.8% and 4.1%, respectively. The metric in Asia, the Middle East & Africa, and Europe grew 3.4% and 5.4%, respectively. On an organic basis, revenues rose 3.9%, 1.8% and 8.9% in Latin America, Asia, the Middle East & Africa, and Europe, respectively. In contrast, organic revenues in North America fell 3.6%.
The adjusted gross profit fell $437 million at cc and the adjusted gross profit margin contracted 580 basis points (bps), reaching 33.4%. This decline was mainly due to increased raw material, transportation costs and unfavorable product mix, somewhat offset by favorable pricing and reduced manufacturing costs stemming from improved productivity.
Mondelez’s adjusted operating income declined $308 million at cc, while the adjusted operating income margin contracted 370 bps to 14.8%. This decrease was mainly caused by escalated input cost inflation and unfavorable product mix, partially mitigated by favorable net pricing, lower advertising and consumer promotion costs, and lower manufacturing expenses resulting from productivity improvements and lower overhead costs.