Mondelez Gains As Americans Snap Up Snacks -- WSJ
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 31, 2017).
Mondelez International Inc. reported rising third-quarter sales as Americans ate more snacks and business improved in emerging markets.
The maker of Oreo cookies, Wheat Thins crackers and Trident gum said sales rose 2.8% in the quarter on a comparable basis, and per-share profit jumped 12%, excluding certain one-time events and currency fluctuations.
"We're encouraged as we see macro trends that have been headwinds over the past several quarters turn more favorable," said Chief Executive Irene Rosenfeld, who is stepping down on Nov. 20.
Mondelez's stock was up nearly 5% in after-hours trading on Monday. Through market close, shares were down 11% this year. Mondelez and other big food companies have struggled as U.S. consumers have shifted to foods perceived as healthier. Americans are shopping more for fresher snacks with simpler ingredients, at the expense of processed cookies and crackers.
Hershey Co. also reported higher-than-expected earnings last week, while rivals like General Mills Inc. and Campbell Soup Co., which sell more packaged and canned meals rather than candy and snacks, have been battered by declining sales.
Like its peers, Mondelez has faced pressure from investors to boost profit margins amid slowing sales in the U.S. Ms. Rosenfeld has dramatically reduced spending in recent years by closing factories and cutting back on things like corporate travel. Mondelez's adjusted operating margin, which is a key metric indicating profitability, rose to 16.9% in the quarter, up from 15.6% the prior year.
Mondelez has created new brands like Véa crackers and belVita breakfast cookies, which it says have attracted more health-focused consumers. In the latest quarter, sales in North America rose 1.3%, indicating that snack-focused companies are faring better in the more competitive food retail environment.
Mondelez has also looked for growth abroad. In the most recent quarter, sales in emerging markets jumped 4.5% to $2.45 billion, representing over a third of its total revenue.
"North American packaged food trends will continue to be a challenge," Chief Financial Officer Brian Gladden said on Monday. "But the global economy's consumer sentiment is generally improving in most markets."
Ms. Rosenfeld, who is stepping down after leading the company for 11 years, will be succeeded by Dirk Van de Put, CEO of Canadian company McCain Foods. Last week, Mondelez also named Coca-Cola Co. executive Glen Walter to head its North America business beginning in November.
Mondelez reported an overall profit of $992 million. Adjusted income, excluding one-time events, was 57 cents a share, compared with 50 cents a share a year ago. Revenue rose 2.1% to $6.53 billion. Analysts polled by FactSet had expected adjusted earnings of 54 cents a share on revenue of $6.44 billion.
Write to Imani Moise at imani.moise@wsj.com
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October 31, 2017 02:47 ET (06:47 GMT)