(Reuters) – Mondelez International, the parent company of Cadbury, cautioned investors on Tuesday about a sharper-than-anticipated decrease in its annual profits. This warning comes as the company navigates the challenges posed by rising costs, notably the soaring prices of cocoa. In reaction to this news, Mondelez’s shares dipped nearly 6% in after-hours trading.
Over the past year, cocoa prices have been steadily climbing. As a major component of chocolate, this price surge has compelled companies like Mondelez to increase the costs of their products. Consequently, consumers who are already feeling the financial squeeze from the ongoing cost-of-living crisis are turning to more affordable options.
Headquartered in Chicago, Mondelez predicts a 10% drop in its adjusted profit for 2025. This figure is steeper than the average 6.7% decline that analysts had projected, according to data gathered by LSEG.
Mondelez, known for its iconic brands like Oreo and Toblerone, explained, “Our outlook does not take into account the imposition of U.S. import tariffs or any potential retaliatory measures from other countries, since the tariff and trade climate remains uncertain and is changing rapidly.”
In Europe, which represents Mondelez’s biggest market by revenue, volumes decreased in the fourth quarter due to a series of price hikes. In contrast, North America saw an uptick in volumes following a 0.9-percentage-point price cut.
The rise in cocoa prices combined with escalating transportation costs contributed to a notable 650-basis-point drop in Mondelez’s adjusted gross profit margin, bringing it down to 31.5%.
For the quarter ending December 31, Mondelez posted net revenue of $9.60 billion, slightly missing the forecast of $9.64 billion. On an adjusted per-share basis, the company reported earnings of 65 cents, just shy of the 66 cents per share that analysts had estimated.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)
