(Reuters) -Mondelez International Inc beat market expectations for quarterly results on Tuesday, as more consumers snacked on the Oreo maker’s chocolates and biscuits over the holiday season even as inflation pinched pockets.
Packaged food makers including Mondelez, Kraft Heinz and Cheerios owner General Mills have all been increasing product prices steadily in the face of rising costs in a bid to protect profits.
While inflation has hammered spending power, consumers have been willing to pay more for their favorite snack brands, instead of trading down to cheaper, private-label alternatives.
That fueled a 23.3% surge in quarterly revenues from the Cadbury chocolate maker’s emerging markets, which includes Latin America and India among other regions, while its developed market revenues jumped 8.2%.
Chicago-based Mondelez also benefited from its recent acquisitions of energy bar maker Clif Bar and Greek food firm Chipita, as sales from those brands helped the company cushion the hit from a stronger dollar.
Mondelez also saw a 2.9% rise in revenues from Europe, even as consumers in the region battled soaring rent and energy costs.
However, the Toblerone maker saw its gross profit margin shrink 160 basis points to 35.4% in the fourth quarter, squeezed by higher costs of transportation and raw materials such as wheat and dairy.
Mondelez projected 2023 organic net revenue growth of 5% to 7%, while adjusted earnings per share is expected to grow in the high single-digit percentage range, on a constant currency basis.
Analysts on average expect 2023 per-share profit to rise 6.1% to $3.11.
The company’s net revenues rose 13.5% to about $8.70 billion in the three months ended Dec. 31, beating analysts’ expectation of $8.33 billion, according to Refinitiv IBES data.
Excluding one-time items, the Ritz crackers maker earned 73 cents per share, also above estimates of 70 cents.
Shares of Mondelez were up 1.2% at $66.25 in extended trading.
(Reporting by Deborah Sophia and Aatrayee Chatterjee in Bengaluru; Editing by Shailesh Kuber)
