What Happened?
Shares of packaged snacks company Mondelez (NASDAQ:MDLZ) fell 6.2% in the morning session after the company reported second-quarter results that beat expectations but maintained a cautious full-year outlook, citing pressure from soaring cocoa costs.
While the Oreo-maker's adjusted earnings and revenue for the quarter surpassed Wall Street estimates, the positive news was overshadowed by its unchanged full-year forecast. The company reaffirmed its guidance, which projected a significant decline in adjusted earnings per share for 2025. Management pointed to "unprecedented cocoa cost inflation" as the key headwind. To combat these rising input costs, Mondelez implemented price hikes, which helped lift revenue. However, these higher prices resulted in a drop in sales volumes, particularly in North America where organic revenue fell 3.4%. This dynamic raised investor concerns about future profitability and consumer demand, leading to the stock's decline.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Mondelez? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Mondelez’s shares are not very volatile and have had no moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Mondelez is up 10.2% since the beginning of the year, but at $65.56 per share, it is still trading 13.4% below its 52-week high of $75.71 from September 2024. Investors who bought $1,000 worth of Mondelez’s shares 5 years ago would now be looking at an investment worth $1,176.
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