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Cadbury-parent Mondelez posts jump in quarterly sales
Cadbury-parent Mondelez sales jump, volume drop weighs on shares By Reuters
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Published Jan 30, 2024 04:10PM ET
Updated Jan 30, 2024 05:07PM ET
© Reuters. Oreo biscuits are seen displayed in front of Mondelez International logo in this illustration picture taken July 26, 2021. Picture taken July 26, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
By Savyata Mishra
(Reuters) -Mondelez International posted a rise in fourth-quarter sales on Tuesday, but price hikes took a toll on volumes as it squeezed demand for the Cadbury parent’s chocolates and salty crackers, sending its shares down more than 4% after the bell.
While price hikes have helped the Toblerone parent improve its profit margin through fiscal 2023, it is now starting to see softer demand as cash-strapped consumers cut back spending.
The company reported organic net revenue growth of 9.8%, but volumes declined 0.4% in the quarter, joining other consumer staples firms such as McCormick (NYSE:MKC) in facing the brunt of significant price increases.
“While other CPG brands that leaned on price hikes to drive growth had seen volumes decline in Q3, Mondelez (NASDAQ:MDLZ) managed to grow its volumes. But now Mondelez’s price hikes are catching up to it,” said Insider Intelligence analyst Zak Stambor.
In the North America segment, the Ritz cracker maker saw volume decline 5.5 percentage points (pp) in the fourth quarter, down from a 4.6 pp rise in the previous quarter. Product prices in the region rose 7.4 pp.
Gross profit margin of 37.3% exceeded market expectation of 36.7%, but was lower than 38.7% it logged in the prior quarter.
Net revenue rose 7.1% to about $9.31 billion in the quarter ended Dec. 31 compared with $8.70 billion a year ago, meeting analysts’ average estimate, according to LSEG data.
Mondelez said from the fourth quarter its results will begin to take a hit from the sale of shares of beverage company JDE Peet, as well as its divestiture of developed market gum business.
Cadbury-parent Mondelez sales jump, volume drop weighs on shares
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