By Deborah Mary Sophia
-Mondelez International Inc flagged a hit to its annual profit due to the Russia-Ukraine war, even as higher prices and resilient demand helped the Oreo maker top Wall Street estimates for quarterly results.
The war has exacerbated the pain for packaged food makers by sparking a rally in wheat, oil, and energy prices when they are still struggling with global supply-chain snarls, higher freight costs and labor shortages.
Mondelez expects a 3-cent hit to its adjusted per share earnings in 2022 and a $200 million impact on its revenue.
“We expect elevated levels of input cost inflation to continue through the remainder of the year, and we will continue to take necessary actions to offset this dynamic,” Chief Executive Officer Dirk Van de Put said.
The Trident gum maker said it now expects inflation in the low double-digit range for the year, up from its prior view of about 8%.
Analysts, however, said the lowered profit outlook was not much of a surprise.
“The efforts Mondelez is making to focus on new products and better-selling items, and lowering controllable costs, should eventually pay off,” said Edward Jones analyst John Boylan, adding the chocolatier’s price hikes so far appear to be accepted by consumers.
The price increases and strong growth in the Ritz crackers maker’s emerging markets helped lift its organic revenue 8.6% in the first three months of the year, and fueled a raise in its full-year core sales forecast.
Mondelez now expects organic net revenue to increase over 4% in 2022. It had previously expected growth in line with its long-term target of more than 3%.
Net revenue rose 7.3% to $7.76 billion in the quarter, topping Refinitiv estimates of $7.39 billion, while adjusted profit of 84 cents per share came in higher than the 74 cents expected.