What Happened?
Shares of packaged snacks company Mondelez (NASDAQ: MDLZ) jumped 5.4% in the afternoon session after the company reported first-quarter results that surpassed Wall Street's top- and bottom-line expectations.
Revenue grew 8.2% year-over-year to $10.08 billion, beating analysts' forecasts, while adjusted earnings per share came in at $0.67, also topping estimates. A key positive for investors was the stabilization of sales volumes, which were flat compared to the same quarter last year, marking an improvement from previous declines. This suggested that the price increases driving revenue growth were not deterring customers.
However, the report was mixed, as the company's adjusted EBITDA missed Wall Street's consensus, and its free cash flow margin declined significantly year-over-year. Despite these weaker points, investors appeared to focus on the headline revenue and profit beats.
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What Is The Market Telling Us
Mondelez’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 6.2% on the news that the company reported second-quarter results that beat expectations but maintained a cautious full-year outlook, citing pressure from soaring cocoa costs.
While the Oreo-maker's adjusted earnings and revenue for the quarter surpassed Wall Street estimates, the positive news was overshadowed by its unchanged full-year forecast. The company reaffirmed its guidance, which projected a significant decline in adjusted earnings per share for 2025.
Management pointed to "unprecedented cocoa cost inflation" as the key headwind. To combat these rising input costs, Mondelez implemented price hikes, which helped lift revenue.
However, these higher prices resulted in a drop in sales volumes, particularly in North America where organic revenue fell 3.4%. This dynamic raised investor concerns about future profitability and consumer demand, leading to the stock's decline.
Mondelez is up 14.8% since the beginning of the year, but at $61.61 per share, it is still trading 12.9% below its 52-week high of $70.75 from July 2025. Investors who bought $1,000 worth of Mondelez’s shares 5 years ago would now be looking at an investment worth $1,011.
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