Mondelez International, Inc.
Analysis
Cocoa relief is arriving, but Mondelez is spending it rather than banking it: both 2026 quarters beat on the top line, while profit guidance stayed put and the payoff was pushed to 2027.What has to go right for the 2027 chocolate margin?
- Cocoa has flipped from the problem to the opportunity.
Cocoa has fallen back toward pre-crisis levels and the market is in surplus, so the input that crushed 2025 now pays for 2027. But this year's supply was bought high: a $1 billion charge in Q1 means the benefit lands a year late.
- Emerging markets became the growth engine, not a side bet.
Emerging markets are the fastest-growing part of the business and the growth is volume-led: India added 100,000 stores. Shelf space drives it, not price rises.Where is that store growth coming from?
- North America turned, but in a category that is not growing.
Volume mix went positive and gained share in every category, by pushing into club, value and convenience channels and doubling brand spending. But the biscuit market is still shrinking, so this is share taken from rivals, not more snacking.How much of it came from club and value channels?
- Cocoa cost reliefCheaper cocoa lets a squeezed chocolate business fund heavier brand spending out of recovering margins instead of cutting costs or raising prices further.
- Emerging market expansionGrowth in emerging markets comes from new stores and wider distribution rather than price, which the bull side treats as durable volume the company controls itself.
- North America turnaroundNorth America has returned to volume and share growth through club, value and convenience channels, which the bull case reads as proof the weak market there is fixable.
- Chocolate price elasticityConsumers pushed back harder than expected on chocolate prices in northern Europe, so the bear case fears Mondelez gives back price without recovering the profit.
- US biscuit weaknessUS biscuit demand is still falling and management assumes no category recovery, so North American improvement depends on taking share rather than on a rising market.
- Profit step-up pushed outThe promised profit recovery keeps moving later, with 2026 earnings held flat while upside is reinvested and the meaningful step-up is now described as arriving in 2027.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$1K | Jul 23 | Sep 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | May 15 | Jul 1 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Jan 23 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$100K | Jan 12 | May 13 |
Kevin Hern Republican · House · OK-1 | Sale | ≥$1K | Aug 5 | Aug 10 |
Congressional trading data provided by QuiverQuant
How Mondelez International turned $38.5B of revenue into $3.5B of operating income.
| Revenue | ||
|---|---|---|
| Biscuits | $18.4B | ▲ 3.31% YoY |
| Chocolate | $12.7B | ▲ 12.87% YoY |
| Gum and Candy | $4.1B | ▲ 0.50% YoY |
| Cheese and Grocery | $2.4B | ▲ 5.72% YoY |
| Beverages | $1.0B | ▼ 8.21% YoY |
| Total revenue | $38.5B | |
| Gross profit | $10.9B | 28.4% |
| Operating income | $3.5B | 9.2% |