Mondelez signals strong EPS growth in 2027, while citing 500,000-ton cocoa surplus and 25% emerging-markets distribution runway

Earnings Call Insights: Mondelez International (MDLZ) Q3 2026

Management View

• "In emerging markets, I would say that the consumer overall, the confidence is resilient" (Chairman & CEO Dirk Van de Put). "India is very positive... Latin America with Mexico and Brazil is solid... China is softer. But overall, we remain constructive on China. The -- if you look at it, we have good volume growth. We have strong top line growth."

• "Year-to-date, I think we've added about 130,000 outlets in India. Brazil, we're now over 1 million stores" (Chairman & CEO Van de Put). He also pointed to Europe improving, saying, "we have positive volume/mix growth of 1.6 pp in Europe" and "unseasonably hot weather... had a 1% negative effect on our growth in Europe."

• "From an EPS standpoint for this year, we're maintaining our outlook" (Executive VP & CFO Amit Banati). "We've been consistent that we're going to reinvest any upside back into the business" and "we are continuing to absorb the costs related to the Middle East war."

• "We remain confident that we are going to drive strong EPS growth in '27" (Executive VP & CFO Banati). He added that confidence was "on the back of volume-led growth" and "our productivity program and the savings that we expect into next year."

• "We acquired a majority stake in Undercover Snacks" (Chairman & CEO Van de Put). He described it as "a crispy quinoa snack" that is "gluten-free" and "allergy-friendly," calling it "highly incremental to our portfolio" and saying, "we think that's a complementary consumer base" as Mondelez takes "one step" toward "healthier snacks."

Outlook

• "From a '26 standpoint... we are maintaining our top line outlook" (Executive VP & CFO Banati). He framed the regional setup as "emerging markets... a strong engine of volume and top line growth," "performing well in North America despite a soft consumer," and "in Europe, we continue to progress well."

• "From a '27 standpoint... we remain confident that we are going to drive strong EPS growth in '27" (Executive VP & CFO Banati). He flagged "increased volatility in the macros" and "headwinds from an inflation standpoint," while also citing "productivity" as a key lever.

• Compared with last quarter’s call, the company’s language shifted from discussing an updated 2026 sales outlook to reiterating it, with Q3 emphasizing, "we are maintaining our top line outlook" and "maintaining our EPS outlook" (Executive VP & CFO Banati).

Financial Results

• The transcript provided was a Q&A session and did not include explicit quarter EPS, revenue, operating income, margin, or cash flow figures; management instead discussed directional drivers. "Very pleased with the productivity program" and "timing of cocoa" were cited as drivers of profitability in Q3 (Executive VP & CFO Banati).

• "We saw that the benefits of a low cocoa cost come through in the quarter" and "we should continue to see that into quarter 4 as well" (Executive VP & CFO Banati).

• On cocoa market fundamentals, "we expect to be ending this year with a surplus of almost 0.5 million tons, so 500,000 tons" and 2026/2027 is "projected to be a deficit of, call it, around 190,000 tons" (Executive VP & CFO Banati). He added, "the coverage levels of the industry, they're at around 9 months" and prices "remained largely range-bound."

Q&A

• Andrew Lazar, Barclays: asked about consumers across regions and next year’s EPS building blocks; Chairman & CEO Dirk Van de Put: "consumer confidence remains soft" in North America and "The K-shaped economy continues"; Executive VP & CFO Amit Banati: "we remain confident that we are going to drive strong EPS growth in '27" backed by "volume-led growth" and "productivity."

• Peter Galbo, BofA Securities: asked about North America pricing into 2027 and Europe pricing dynamics; Executive VP & COO Luca Zaramella: "we didn't reduce prices" and "we will be very selective on the pricing actions that we will take" with most actions "through PPA"; on Europe, "we made some selective price adjustments" and "nothing really to worry about."

• Robert Dickerson, BTIG: asked about Undercover Snacks and cocoa; Chairman & CEO Van de Put: Undercover is "highly incremental" and "the deal will close by early '27" and "It won't make a big difference in '27"; Executive VP & CFO Banati: cocoa market is "fundamentally in a different position than the spike that we saw in '24" with "record level of surplus."

• Christopher Carey, Wells Fargo: asked about Latin America volumes and Q4 profit framing; Executive VP & COO Zaramella: "the drag... is Argentina, which we manage for cash" and excluding Argentina "the volume mix for the non-chocolate business has been at about 4% to 5%"; Executive VP & CFO Banati: "without getting into specific quarterly guidance" he said, "you can expect to see us continue to grow volume mix" and "strong gross profit and OI dollar growth."

• Alexia Howard, Bernstein: questioned confidence in 2027 EPS vs. limited 2027 sales outlook and European price declines; Executive VP & CFO Banati: "it's premature to talk about the '27" sales outlook but "we are very focused on driving volume"; Executive VP & COO Zaramella: on negative pricing in Europe, "the straight answer is yes."

Sentiment Analysis

• Slightly negative (analysts): Alexia Howard pressed, "little has been said about the outlook for sales growth," while Carey highlighted Q4 having "a wide range for profit outcomes," and Dickerson noted cocoa is "talking about that a fair amount."

• Slightly positive (management): Executives repeatedly emphasized confidence, including "we remain confident" on 2027 EPS (Executive VP & CFO Banati) and "Good quarter. We feel good about Q4 also" (Chairman & CEO Van de Put).

• Compared with last quarter, Q3 featured more pointed questioning on sales algorithm visibility and European price drag, while management leaned more heavily on reiteration language such as "maintaining our outlook" rather than discussing guide changes.

Quarter-over-quarter comparison

• Q3 introduced a new portfolio action: "we acquired a majority stake in Undercover Snacks" and positioned it as future-facing, while Q2 focused more on innovation framework and the Biscoff collaboration rather than a new acquisition (Chairman & CEO Van de Put).

• Q3’s Europe message added near-term price pressure visibility: "the straight answer is yes" on continued negative price growth (Executive VP & COO Zaramella), whereas Q2 framed Europe as improving as it "start[s] lapping prior year pricing" (Executive VP & COO Zaramella).

• Cocoa commentary shifted speakers and emphasis: Q3’s detailed cocoa view was led by the CFO ("surplus of almost 0.5 million tons"), while Q2’s cocoa framing leaned more on the COO (Executive VP & COO Zaramella).

Risks and Concerns

• "Inflation driven by the conflict in the Middle East... is a concern with consumers" (Chairman & CEO Van de Put), while the company also flagged direct business impact: "we are continuing to absorb the costs related to the Middle East war" (Executive VP & CFO Banati).

• Cost inflation remained a recurring theme: "we are seeing inflation in... dairy, oil, packaging" (Executive VP & CFO Banati), and North America faced "inflationary pressure" with pricing to be "very selective" (Executive VP & COO Zaramella).

• Europe pricing optics were highlighted as a near-term overhang: "the straight answer is yes" on negative pricing persisting for "the couple of quarters to come" (Executive VP & COO Zaramella).

Final Takeaway

Management’s Q3 discussion emphasized resilience in emerging markets, a cautious North America consumer backdrop, and a Europe recovery anchored in execution and share. The company reiterated 2026 top-line and EPS outlooks, repeated confidence in delivering "strong EPS growth" in 2027 through volume-led growth and productivity, and announced a majority-stake acquisition of Undercover Snacks as a bolt-on move to broaden into "better-for-you" snacking, while acknowledging inflation and conflict-related cost pressures and signaling continued near-term pricing softness in Europe driven by lapping last year’s increases.

Read the full Earnings Call Transcript

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