Mondelez Earnings: Brand Prowess Seen in Profuse Sales Growth, but We Wouldn’t Indulge in Shares Yet

Much consternation has centered on the financial health of the consumer, but this has failed to impede Mondelez’s top-line trajectory, up 16% on an organic basis (entirely a byproduct of higher prices as consolidated volumes held flat). In our view, the performance is attributable to the firm’s unwavering commitment to bring localized innovation to each of its global markets and to tout the value of this fare (with advertising and consumer spending up 17% in the quarter), while also extending the distribution of its mix into new channels across its footprint. This aligns with our forecast for research, development, and marketing around 6% of sales ($2.6 billion) annually on average through fiscal 2032. We think this serves to not only keep its fare top of mind with consumers, but to also ensure it remains an entrenched operator in the eyes of its retail partners, supporting its wide moat.