Mondelez: Snacks holding their own amid consumer uncertainty

CHICAGO — Cocoa cost normalization clipped adjusted earnings for Mondelez International in the fiscal 2026 first quarter, as executives said solid top-line results portend a promising outlook for snacks despite ongoing financial pressures on shoppers, namely in the US market.

“We’re pleased to share that 2026 is off to a solid start, with encouraging green shoots in several key markets, against a backdrop of ongoing consumer uncertainty,” said Dirk Van de Put, chairman and chief executive officer.

“Snacking growth and penetration remain durable on a global basis,” he said. “Core snacking growth remains strong in emerging markets, while developed market growth is solid, with the exception of the US, due primarily to economic anxiety. Our penetration remains very strong across key markets, including US biscuit and UK chocolate.”

Net income for the quarter ended March 31 rose 39% to $560 million, equal to 44¢ per share on the common stock, from $402 million, or 31¢ per share, a year earlier. Excluding the mark-to-market impact from commodity (mainly cocoa) derivatives, among other items, adjusted net earnings were $859 million, or 67¢ per share, down 11% from $962 million, or 74¢ per share, a year ago, Mondelez said. That topped Wall Street’s high-end estimate for adjusted earnings per share of 65¢ for the quarter.

“Profitability declined, as expected, due to phasing of cocoa input costs — with adjusted operating income down 19% and adjusted EPS down 14.9%,” Van de Put said. “Although cocoa costs remain elevated relative to historical trends, we’re continuing to see gradual normalization.”

Solid top-line growth and cost discipline partially offset the cocoa cost shift and “significant reinvestment,” he said. “We expect cocoa cost-phasing headwinds to impact Q2, but to a lesser degree.”

North America ekes out growth

First-quarter net revenue climbed 8% year over year to $10.08 billion from $9.31 billion. Organic revenue grew 3%, reflecting a 3.5% rise in pricing, stemming mainly from cocoa costs, and a 0.5% dip in volume/mix. All regions saw reported revenue growth in the quarter, but operating income declined in all regions except Latin America, reflecting the impact of cocoa costs.

“We delivered Q1 (organic) revenue growth of 3%, with positive underlying volume/mix when excluding the impact of package downsizing,” Van de Put said. “We’re seeing strong, sustained top-line growth in emerging markets, while developed markets are improving.”

He added, “Moving forward through 2026, we remain focused on continuing to execute our consumer-centric strategy — stepping up investments in our brands to drive consumer loyalty, accelerate innovation and strengthen retailer partnerships to grow category leadership. We’re doubling down on expanding distribution in emerging markets, fueled by digitization in our supply chain and sales force, while accelerating expansion into growing developed market channels such as club, convenience and discount stores.”

Ritz was among a range of brands – including Oreo, Chips Ahoy!, Evirth, Lu, Grenade, Perfect, Zbar and Builders – generating first-quarter organic sales growth, Mondelez said.

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In North America, first-quarter net revenue totaled $2.56 billion, up 0.5% on both a reported and an organic basis, reflecting a 0.9% uptick in pricing and a 0.4% dip in volume/mix. Adjusted operating income fell 15% to $400 million.

“While US biscuit category volume remains soft, solid contributions from growth channels including convenience, club and online helped improve this volume performance on a sequential basis,” Van de Put said. “Our Canada business continues to deliver solid growth, as well as our North America Ventures portfolio, which includes solid results from Perfect Snacks, Hu and Tate’s.”

Share grows in biscuits

Among core categories, biscuits and baked snacks organic revenue rose 1.7% as volume/mix edged up 0.6%.

“Brands including Oreo, Ritz, Chips Ahoy!, Evirth, Lu, Grenade, Perfect, Zbar and Builders all posted growth,” Van de Put said. “The US biscuit business posted slight growth in the quarter.”

Lifted by higher pricing due to cocoa costs, chocolate generated 5.5% organic revenue growth despite a 2.1% decrease in volume/mix. Van de Put said global and “local jewel” brands turned in solid results, including Cadbury Dairy Milk, Lacta, Toblerone and Hu.

Gum and candy organic revenue rose 3.1%, aided by a 0.6% gain in volume/mix and strong performances in Brazil, Australia/New Zealand and the United States. Van de Put noted the Sour Patch Kids brand delivered robust growth in the quarter.

Mondelez said its overall snacks market share grew 5% in the first quarter and, excluding the Easter calendar shift, was up an estimated 4%. Category share gained 1.7% in biscuits and baked snacks, 4.7% in gum and candy, and nearly 12% in chocolate (up 7% excluding the earlier Easter).

“Our snacking categories continue to demonstrate solid growth year-to-date on a global basis — 40% of our revenue base held or gained share year-to-date,” Van de Put said. “Soft US biscuit performance was the primary driver of overall share performance, albeit there was an inflection point in March. Chocolate growth remains strong, primarily related to inflation-driven pricing. Europe chocolate returned to slight volume share growth during the quarter. Our performance has improved to approximately 70% of our revenue base holding or gaining share in the latest month’s reading.”

Chicago-based Mondelez upheld its 2026 guidance for adjusted EPS growth of flat to 5% and organic net revenue growth of flat to 2% in constant currency, with currency translation expected to lift net revenue by 2% and adjusted EPS by 6¢ per share. The company said its outlook doesn’t anticipate incremental tariff costs.

“This solid start to the year gives us confidence in reaffirming our 2026 outlook,” Van de Put said. “While consumers around the world continue to face cost-of-living pressures, we remain constructive on the overall snacking business and excited about our brand and category growth plans.”