Snack Giant Mondelez Faces Investor Backlash After Slashing Profit Outlook

Mondelez International shares experienced a significant downturn this week following the company's unexpected downward revision of its full-year 2025 financial guidance. The snack food conglomerate, known for brands including Oreo and Cadbury, attributed its weakened outlook to persistent cocoa price inflation and softening consumer demand across key markets.

While the company's Tuesday earnings release showed some positive elements, with adjusted earnings per share of $0.73 exceeding analyst projections, overall revenue of $9.74 billion fell short of expectations. The truly market-moving development emerged from management's substantially reduced full-year forecast.

The company now anticipates a approximately 15% decline in adjusted earnings per share, a significant deterioration from the previously projected 10% decrease. Organic revenue growth expectations were similarly adjusted downward, moving from around 5% to just 4% or higher.

Market Reaction and Technical Position

Investors responded immediately to the disappointing guidance. In after-hours trading Tuesday, Mondelez shares plummeted more than 6%, followed by an additional 3.92% decline Wednesday to close at $57.85.

Technical indicators now paint a challenging picture for the stock. At its current trading level of $57.85, the shares sit substantially below both the 50-day moving average of $62.21 and the 200-day moving average of $65.08. The 52-week high of $71.15 appears distant under current market conditions.

Cost Pressures and Demand Weakness Squeeze Performance

Record-high cocoa prices continue to exert substantial pressure on Mondelez's profit margins. Simultaneously, the company faces noticeably weaker consumer demand in critical markets including Europe and North America. Despite implementing global price increases averaging 8.0% year-over-year, the company couldn't fully offset negative volume and mix effects:

Should investors sell immediately? Or is it worth buying Mondelez?

• Global volume declined by 4.6 percentage points
• European markets experienced the most severe contraction at 7.5%
• North American volumes decreased by 1.8%

Strategic Initiatives Aim to Restore Momentum

In response to these challenges, Mondelez is implementing several strategic countermeasures. The company is focusing on portfolio enhancements through sugar-free and gluten-free Oreo variations, alongside protein-rich offerings such as Clif Builders bars.

Concurrently, the corporation is making substantial technological investments, committing over $40 million to generative artificial intelligence for marketing applications. This initiative aims to reduce content production costs by 30% to 50%.

The AI tools are scheduled for deployment beginning in November on major retail platforms for Oreo, followed by expansions for Lacta in Brazil and Cadbury in the United Kingdom in subsequent months.

Analyst Community Adjusts Expectations

The profit warning triggered multiple analyst downgrades:

• Stifel reduced its price target from $76 to $70
• Bernstein adjusted downward from $85 to $84
• Mizuho and JPMorgan similarly lowered their expectations

Despite these adjustments, many market experts maintain positive long-term ratings on the stock, with the current consensus standing at "Moderate Buy."

Looking ahead, Mondelez management expressed cautious optimism for 2026, anticipating initial signs of stabilization in cocoa pricing. The company targets high single-digit profit growth for the coming year, contingent upon successful implementation of its strategic countermeasures.