Mondelez International, Inc. (NASDAQ:MDLZ) is anticipated to report growth in both top and bottom lines when it releases its fourth-quarter 2023 earnings on January 30. The Zacks Consensus Estimate for revenues stands at $9.3 billion, indicating a nearly 7% increase from the previous year’s reported figure. For the full year 2023, the consensus estimate for revenues is approximately $36 billion, reflecting a growth of 14.3% compared to the year-ago period.
The Zacks Consensus Estimate for quarterly earnings has seen a slight uptick to 78 cents per share in the last seven days, suggesting a 6.9% growth from the figure reported in the same quarter of the previous year. The consensus estimate for 2023 earnings is $3.25 per share, indicating a rise of 10.2% from the corresponding period last year.
Mondelez has consistently outperformed earnings expectations, with a trailing four-quarter average earnings surprise of 7.3%. In the last reported quarter, the company exceeded expectations with an earnings surprise of 5.1%.
Factors to Consider
Brand and Capability Investments: Mondelez’s continuous reinvestments in its brands and capabilities, particularly in the digital space, have contributed to its success. The company’s focus on revenue growth management and portfolio reshaping efforts has been effective.
Acquisitions in the Snacking Space: Mondelez has strategically invested in acquisitions, especially in the snacking sector, which has positively impacted its performance. The company’s prudent acquisitions have enhanced its presence in key snacking categories.
Guidance for 2023: Management expects organic net revenue growth of 14-15% in 2023, and adjusted earnings per share (EPS) growth on a constant currency basis of more than 16%. The company is optimistic about the contributions from its snacking categories like chocolates and biscuits.
Category Expansion: Mondelez has been expanding its presence in the snacking categories, particularly chocolates and biscuits. The company anticipates revenue growth of 8.2% in the chocolate category and 13.4% in the biscuit category for 2023.
Emerging Market Strength: Management is encouraged by the strength in emerging markets. The company expects revenue growth of 6.8% in emerging markets in the fourth quarter and 14.7% for the full year 2023.
Challenges
Cost Inflation: Mondelez has been grappling with cost inflation, and management expects a double-digit increase in inflation for 2023. Rising costs could impact the company’s margins.
Currency Headwinds: Unfavorable foreign currency movements are anticipated to affect net revenues by nearly 4% and adjusted EPS by 15 cents in 2023.
Investors and analysts will closely watch Mondelez’s earnings report for insights into how the company navigated these challenges and capitalized on growth opportunities.
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