Mondelez International stock (NASDAQ:MDLZ) is down (-13%) for the year, faring better than the S&P 500 (NYSEARCA:SPY), which is down (-25%). Mondelez is the world’s biggest cookie biscuit supplier and the third largest chocolate manufacturer, after only #5 Hershey’s (NYSE:HSY).
Developed markets are declining as consumer confidence falls while developing markets remain robust. Despite economic challenges or seasonality, its comfort and low-cost snack food sales remain robust. The popularity of its name-brand snacks and sweets creates a significant barrier to generic and private-label imitations.
Mondelez Stock: Profit Generator
Mondelez reported its fiscal second-quarter 2022 earnings for June 2022 on July 28, 2022. The Company announced an earnings-per-share (EPS) result of $0.67, excluding non-recurring items, which was $0.03 more than the $0.64 average analyst forecast. Net sales increased 9.5% yearly (YoY) to $7.27 billion, above the expert expectation of $6.8 billion for the quarter. Organic net sales increased by 13.1%, with an underlying volume/mix increase of 5.1%. In 2022’s first half, the Company returned $2.5 billion to stockholders. The dividend was increased to $0.385 per share by the Company. Clif Bar, a manufacturer of protein snack bars, will be acquired by Mondelez. For the fiscal year 2022, the Company anticipates organic net sales growth of 8%.
Resilience and Growth
“Our chocolate and biscuit businesses continue to display excellent volume growth and price resilience across both established and developing regions,” said Mondelez CEO Dirk Van de Put. These results and continuous cost control, simplification, and revenue growth management have resulted in healthy profit dollar growth, stock (NASDAQ:MDLZ) growth, and good cash flow, allowing us to enhance our dividend by 10%.” With the purchase of Clif Bar, Mondelez will be able to build a billion-dollar snack bar company with local and worldwide development potential.
Mondelez Stock: Managing Headwinds
Mondelez outlined its strategies for dealing with challenges like inflation, supply chain disruptions, and a high US currency. The pandemic’s inflation is driving up input prices such as electricity, transportation, packaging, wheat, dairy, and food oils. The Company is implementing price increases in important markets to combat inflationary pressures. They are now 85% covered for the remainder of 2022, with essential sectors almost completely hedged. Volatility in the supply chain is being felt mostly in the United States as a result of transportation and container supply trailing demand and labor shortages at third-party providers. The Company is increasing production and storage capacity, introducing new retention techniques, and prioritizing essential SKUs. The Company is hedging currencies and net investments to offset the strong US dollar against the euro and pound sterling. Its packaged goods have a long shelf life and are inexpensive, which helps to maintain sales even during recessions.
Featured Image – Megapixl © Casimirokt
Author Okoro Chinedu 
