Mondelez International (NASDAQ:MDLZ) said it expects momentum in emerging markets, improving execution in North America and a recovery in Europe to support a strong second half, while maintaining its full-year earnings-per-share outlook despite increasing its top-line forecast.
Chairman and Chief Executive Officer Dirk Van de Put said the company delivered 4.4% top-line growth in the second quarter, supported by strong volume. Executives described growth in emerging markets as structural rather than cyclical, citing category underpenetration, distribution expansion and sustained reinvestment.
Emerging markets remain a growth driver
The company has expanded distribution substantially, adding 100,000 stores in India. Its Brazilian business now reaches 1 million stores, while distribution is continuing to expand in China and Southeast Asia.
“The categories are still very under-penetrated,” Van de Put said. “We still have a long runway of more consumers consuming more every day.”
Chief Financial Officer Amit Banati, speaking on his first earnings call after joining the company, said Mondelez has an “advantaged emerging markets platform” and opportunities to increase penetration, distribution and new consumption occasions through innovation. He also identified supply-chain productivity and AI-enabled efficiencies as potential sources of funds for future reinvestment.
North America shows sequential improvement
Mondelez said its North American business accelerated sequentially from the first quarter, recording positive volume mix and strong net revenue growth while gaining share across its categories. Van de Put said the company expects that performance to continue in the second half.
Consumer confidence has rebounded from lows but remains subdued, he said, as inflation and energy prices continue to pressure household budgets. The company is seeing a “K-shaped” consumer environment, with shoppers moving toward lower-priced formats while premium and better-for-you offerings also perform well.
High-single-digit growth in value channels and mid-single-digit growth in away-from-home channels helped support results. Van de Put pointed to RITZ crackers, including RITZ Drizzled, Sour Patch Kids Chews, Oreo, ZBar, Give & Go, Perfect Snacks, Tate’s and Hu as areas of strength.
Management attributed the improvement to disciplined promotions, innovation, price-pack architecture and increased advertising and consumer investment. Van de Put said the company plans to accelerate reinvestment during the second half.
He added that Mondelez sees further North American distribution opportunities in value, convenience and away-from-home channels, where the company historically had not prioritized growth to the same degree as traditional food retail. The company is developing channel-specific products and working more directly in certain convenience markets, he said.
Europe expected to improve as pricing comparisons ease
Chief Operating Officer Luca Zaramella said Mondelez’s European chocolate business is on a positive volume-mix trajectory, with volumes expected to improve in the second half as the company laps prior-year pricing actions.
He said negative pricing in Europe during the second quarter reflected adjustments made in the latter half of the prior year to address specific price gaps. Market share has improved in recent months in both volume and value terms, according to Zaramella.
An unprecedented heat wave affected chocolate consumption and led Mondelez to keep trade inventories controlled during the quarter, he said. After the heat wave, management expects more activation around Biscoff and continued growth from Milka Choco Croissant. Zaramella said the company anticipates better top-line performance and a profitability rebound in Europe in the second half, setting up continued growth into 2027.
Guidance maintained for earnings, top-line outlook raised
Banati said Mondelez raised its full-year top-line outlook to “at least” 2% growth, with similar growth levels expected across the third and fourth quarters. The company expects positive volume mix and a modest pricing contribution for the balance of the year.
However, the company maintained its EPS outlook, saying it intends to reinvest upside into areas showing momentum, including emerging markets, innovation and distribution. Management also cited incremental costs tied to the Middle East conflict, which it said are incorporated into its outlook.
Zaramella said earnings will be more weighted toward the fourth quarter because cocoa-related phasing is expected to affect the third quarter before reversing in the fourth quarter. Interest and tax comparisons will also pressure third-quarter EPS, he said, characterizing the timing effects as mechanical rather than structural.
While Mondelez no longer provides guidance based on gross-margin percentage, Zaramella said gross profit dollars rose 3% in the second quarter and should accelerate in both the third and fourth quarters. He also expects EBIT in dollar terms to rise in both periods, with greater growth in the fourth quarter.
Cocoa, innovation and 2027 outlook
Management said the cocoa market is fundamentally in a better position than it was during the 2024 crisis, despite recent price increases. Zaramella cited an expected surplus of at least 500,000 metric tons this year, equal to about 10% of total cocoa demand, and said industry coverage stands at 10 months compared with seven months during 2024.
He said early pod counts indicate the next crop may not be exceptional, while El Niño and short-covering activity have also supported prices. Still, Zaramella said Mondelez expects its 2027 earnings to be insulated to an extent from commodity volatility through positive volume mix, productivity initiatives, AI-related overhead efficiencies and a portfolio strategy aimed at reducing cocoa intensity.
Innovation remains a central part of the strategy. Van de Put said products introduced in the past three years account for slightly more than 10% of Mondelez net revenue, with a longer-term goal of potentially moving toward 15%.
He highlighted the company’s Biscoff collaboration, which includes Biscoff-filled chocolate products, licensed biscuit distribution in markets such as India and a planned Brazil launch early next year, as well as ice cream products. Van de Put said he believes the broader collaboration could eventually be worth between $500 million and $1 billion in the coming years.
About Mondelez International (NASDAQ:MDLZ)
Mondelez International is a global snacks company headquartered in Chicago, Illinois, formed in 2012 when Kraft Foods split to create a business focused on snack foods and a separate North American grocery company. Mondelez develops, manufactures, markets and distributes a broad portfolio of snack products intended for retail, foodservice and e?commerce channels around the world.
The company’s product mix centers on biscuits and cookies, chocolate and confectionery, gum and candy, and savory crackers and baked snacks.
