Packaged snacks company Mondelez (NASDAQ:MDLZ) met Wall Street’s revenue expectations in Q4 CY2024, with sales up 3.1% year on year to $9.60 billion. Its non-GAAP profit of $0.65 per share was in line with analysts’ consensus estimates.
Is now the time to buy Mondelez? Find out in our full research report .
Mondelez (MDLZ) Q4 CY2024 Highlights:
“Fiscal 2024 was another strong year of performance for our company. We delivered balanced top-line growth, strong earnings, and robust free cash flow generation, while returning significant capital back to shareholders," said Dirk Van de Put, Chair and Chief Executive Officer.
Company Overview
Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Shelf-Stable Food
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.
With $36.44 billion in revenue over the past 12 months, Mondelez is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have).
As you can see below, Mondelez grew its sales at a decent 8.3% compounded annual growth rate over the last three years despite selling a similar number of units each year. We’ll explore what this means in the "Volume Growth" section.
This quarter, Mondelez grew its revenue by 3.1% year on year, and its $9.60 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products will see some demand headwinds.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link .
Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
To analyze whether Mondelez generated its growth from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.
Over the last two years, Mondelez’s quarterly sales volumes have, on average, stayed about the same. This stability is normal as the quantity demanded for consumer staples products typically doesn’t see much volatility. The company’s flat volumes also indicate its average organic revenue growth of 9.8% was generated from price increases.
In Mondelez’s Q4 2024, year on year sales volumes were flat. This result was more or less in line with its historical levels.
Key Takeaways from Mondelez’s Q4 Results
Revenue and EPS were roughly in line. While full-year organic revenue guidance calling for 5% topline growth exceeded expectations, full-year EPS guidance calling for a 10% year-on-year decline missed expectations. The company blamed "unprecedented cocoa cost inflation" Overall, this quarter could have been better and the guidance shows how input cost inflation can really put a dent in profits. The stock traded down 3.8% to $54 immediately following the results.
Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free .