Mondelez Adjusts Outlook, Citing Retail Restocking and Europe Weakness
Mondelez International, Inc. (MDLZ) presented a robust third quarter in 2025, exceeding anticipated revenue and earnings figures. However, the company’s outlook for the near term has adopted a more measured approach. Executives explained that this shift in guidance isn’t indicative of underlying weakness but is primarily driven by specific, temporary headwinds encountered during the quarter. Mondelez now anticipates 2025 organic net revenue growth to be at least 4%, a reduction from the previously stated 5%. Adjusted earnings per share (EPS) is also revised downwards, now projecting a 15% decline on a constant-currency basis, a steeper drop than the formerly estimated 10%.
Several factors contributed to this revised trajectory. U.S. retailers conducted inventory reductions more aggressively than initially projected. This resulted in a temporary slowdown in shipments and introduced greater volatility to near-term comparisons. Management emphasized that this is fundamentally a timing issue, reflecting current market dynamics rather than a decline in consumer demand. Furthermore, Europe presented a challenge due to unusually high temperatures and heightened price sensitivity impacting chocolate volume sales. The impact of tariff uncertainty also played a role, adding to costs and potentially dampening consumer sentiment in certain markets, contributing to a cautious approach as Mondelez plans for the remainder of the year. Despite these pressures, the company is concentrating on targeted pricing strategies, strengthening collaborative relationships with retail partners, and prioritizing expansion into value and club channels. A key element of their strategy is maintaining robust coverage of cocoa supply, providing a degree of flexibility as commodity markets fluctuate.
The performance of Mondelez shares has lagged behind broader market trends over the past three months. As of the report’s publication, shares of this Zacks Rank #4 (Sell) company had decreased by 6.6%, compared to an industry decline of 7.5%. Mondelez’s performance lagged the Consumer Staples sector’s decline of 4.3% and trailed the S&P 500’s gains of 6.3% during this period.
Valuation Considerations: Mondelez currently trades at a forward 12-month Price-to-Earnings (P/E) ratio of 18.18, surpassing the industry average of 14.72. Given the challenging near-term environment, this elevated multiple appears difficult to sustain. A Value Score of D reinforces these concerns, highlighting the need to carefully assess the company’s prospects.
Comparative Analysis: Several other prominent food stocks are currently viewed favorably by analysts. United Natural Foods, Inc. (UNFI) holds a Zacks Rank #1 (Strong Buy). Currently, UNFI is projected to deliver sales growth of 2.5% and EPS growth of 167.6% compared to the year-ago figures, with an average four-quarter earnings surprise of 416.2%. Lamb Weston (LW) maintains a Zacks Rank #1 (Strong Buy) and currently forecasts sales growth of 1.3% and EPS growth of 16%, alongside an average four-quarter earnings surprise of 16%. The Chefs’ Warehouse, Inc. (CHEF) also carries a Zacks Rank of 2 (Buy) and is expected to deliver sales growth of 8.1% and EPS growth of 29.3% over the current fiscal year, with an average four-quarter earnings surprise of 14.7%.
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