Mondelez Revenue Growth Slows as Volumes Recover
Adjusted gross margin expanded 0.2 percentage point to 34.0%, reversing two quarters of contraction.
Mondelez International (MDLZ), the snack maker, reported slower second-quarter revenue growth as easing pricing was partly offset by a return to volume gains. Net revenue rose 4.1% to $9.36 billion, decelerating from 8.2% growth in the first quarter and 9.3% in the fourth quarter of 2024.
Organic revenue growth slowed to 2.2% from 3.0% in the prior quarter, but its composition shifted toward demand. Volume and mix contributed 0.7 percentage point after subtracting 0.5 point in the first quarter and 4.8 points in the fourth quarter, while pricing contributed 1.5 points, down from 3.5 points and 9.9 points, respectively.
Adjusted earnings improved sequentially to $0.73 a share from $0.67, and their constant-currency decline narrowed to 2.7% from 14.9% in the first quarter. GAAP diluted earnings jumped 144.9% to $1.20 a share, largely reflecting favorable year-over-year commodity and currency derivative mark-to-market changes.
The underlying margin picture also improved from the first quarter. Adjusted operating margin rose sequentially to 13.1% from 11.7%, though it remained 1.2 percentage points below the prior year as raw-material, selling and administrative, and advertising costs weighed on results. The year-over-year contraction had been 3.1 points in the first quarter.
North America accelerated for a second consecutive quarter, with organic revenue growth reaching 3.4% from 0.5% in the first quarter and a 0.5% decline in the fourth quarter. Volume and mix contributed 1.2 percentage points after declining in both earlier periods.
Europe moved in the opposite direction, posting a 3.5% organic decline after falling 0.6% in the first quarter and growing 8.3% in the fourth quarter. Latin America organic growth accelerated to 8.4% as volume and mix turned positive, while growth in Asia, the Middle East and Africa moderated to 7.1% from 11.3%.
First-half operating cash flow declined to $1.32 billion from $1.40 billion a year earlier, even as net earnings more than doubled to $2.12 billion. Mondelez generated about $0.7 billion in first-half free cash flow and continues to expect approximately $3 billion for the year.
Mondelez now expects at least 2% organic revenue growth in 2024 and continues to forecast constant-currency adjusted EPS growth of flat to 5%. The company also raised its quarterly dividend 4% after returning $1.5 billion to shareholders during the first half.