Dive Brief:
- Mondelez International cut its sales forecast for the year to a range of 2% to 2.5%, down from an earlier forecast of 3%.
- The move comes as the maker of Oreos, Trident, Ritz, and other brands said sales in the most recent quarter fell 1.8% to $8.4 billion -- worse than what Wall Street had expected.
- However, cost cutting by the company made up for the revenue shortfall, as Mondelez reported a 3.5% rise in net earnings.
Dive Insight:
Cost-cutting and elaborate merger and spinoff combinations like what Mondelez is doing with its coffee businesses can buy the company some time. And Wall Street tends to applaud such moves over the short term.
But there are only so many units that can be spun, businesses that can be sold, and costs that can be cut. Mondelez needs to find organic growth. And that isn't easy to come by in the snack business in 2014.