Mondelez International, Inc.

MDLZ · NASDAQ · USD

Can Mondelez convert lower cocoa costs into volume growth in Europe and North America while holding the prices it took, with emerging markets still carrying the top line?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Cocoa cost relief

    Cheaper cocoa lets a squeezed chocolate business fund heavier brand spending out of recovering margins instead of cutting costs or raising prices further.

  • Emerging market expansion

    Growth 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 turnaround

    North 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.

Bear case

  • Chocolate price elasticity

    Consumers 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 weakness

    US 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 out

    The 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.

  • Cocoa supply risk

    Cocoa is bought well ahead of use, so locked-in costs and a supply base concentrated in West Africa keep the input risk alive even as prices fall.

Bull and bear points

Growth & Execution

In short: Emerging markets grow on distribution and volume, while North America and Europe await a consumer recovery.

Bull · 2

  • Emerging markets grow on store count, not price

    Emerging markets are about 40% of the business and grew 6.3% in the first quarter with volume mix turning positive; management credits new stores and wider distribution rather than price rises.

    Q1 FY2026 call

  • North America returns to volume and share growth

    North America posted positive volume mix and share gains in every category in the second quarter, which management says came from club and value channels and new products rather than a better category.

    Q2 FY2026 call
Bear · 2

  • US biscuit volumes are still contracting

    The US biscuit category fell 4% in volume and management plans for no recovery in the first half, so North America growth has to come from taking share rather than from a rising market.

    Q4 FY2025 call

  • European chocolate demand is more price sensitive

    Elasticity in European chocolate ran at 0.7 to 0.8 against an expected 0.4 to 0.5, forcing Mondelez to reset price points and pack sizes in the UK and Germany and give back some price.

    Q3 FY2025 call

Profitability & Financial Strength

In short: Margins recover as cocoa costs ease, but brand spending and Middle East costs absorb part of the gain.

Bull · 2

  • Gross margin widens as cocoa costs fall

    Gross margin reached 42.6% in the second quarter, up 9.9 points, helped by lower cocoa costs and supply chain savings, though the year-earlier quarter was depressed by peak cocoa costs.

    Filed financials

  • Free cash flow covers the dividend and buybacks

    Free cash flow of $3.1 billion over the last twelve months equals 7.8% of revenue, giving management room to fund brand investment and shareholder returns from operations rather than borrowing.

    Filed financials
Bear · 2

  • The 2026 profit target has become vaguer

    In late 2025 management targeted high single-digit EPS growth for 2026; on later calls it only maintains the EPS outlook and says any upside would be reinvested, with the profit step-up pushed to 2027.

    Tone shiftQ3 FY2025 → Q1 FY2026

  • Shareholder returns exceed free cash flow

    Buybacks and dividends of $3.5 billion over the last twelve months equal 113% of free cash flow, so part of the return is funded from the balance sheet rather than current cash generation.

    Filed financials

Market Position

In short: Mondelez leads in biscuits and chocolate, but its pricing power has limits where competitors undercut it.

Bull · 2

  • Biscoff partnership extends the chocolate and biscuit range

    Biscoff-filled chocolate and licensed Biscoff biscuits sold out their first production line in India, and management expects the collaboration to be worth $500 million to $1 billion in the coming years.

    Q2 FY2026 call

  • Chocolate pricing has turned less combative

    Earlier management blamed private competitors for not matching its price rises; it now describes chocolate pricing as rational, with no new price moves expected while the industry waits on the cocoa crop.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • Retailers and private rivals limit chocolate pricing

    After large chocolate price increases, Mondelez found retailers taking more margin than usual in some markets, which limits how much of the higher cocoa cost it can keep passing through.

    Q3 FY2025 call

  • Cocoa supply depends on two West African countries

    Ghana and Ivory Coast supply roughly 60% to 65% of the world's cocoa, so a bad harvest or disease there moves Mondelez's biggest input cost regardless of its own pricing decisions.

    Q4 FY2025 call