- Mondelez reported a 16% increase in diluted EPS for the second quarter to $0.29 per share, though net revenues fell 17.7% to $6.3 billion. Organic net revenue growth came in at 1.5%.
- The company also announced its forthcoming launch of the Milka chocolate brand in China and its "substantial investment in e-commerce" as evidence of sustainable growth opportunities, Mondelez chairman and CEO Irene Rosenfeld said in a statement.
- Currency headwinds and loss of revenue from Mondelez's divested coffee joint venture and Venezuela deconsolidation had a negative impact on revenue, but the company expanded its adjusted operating income margin by 210 basis points to 15.2%.
China would be a crucial source of growth for Mondelez at this point. Sales fell in all markets but North America, which gained 0.4%, ranging from a 0.1% dip in Asia Pacific to a 32% plunge in Latin America. In April, Mondelez partnered with Alibaba Group, China's e-commerce leader, to host a store for its products on Alibaba's Tmall.com platform.
The announcement hinted at Mondelez's interest in this $2.8 billion market, where consumers shop online for groceries more commonly than in the U.S. This has encouraged other companies, such as Nestle and Mars, to also expand their e-commerce efforts in the region.
Another takeover bid for Hershey may not be off the table yet either, analysts suggest. Hershey would give Mondelez a more solid foundation in the North American market, which is a relatively small but key market for Mondelez. Hershey also offers better-for-you snack brands like Krave jerky and SoFit, an arena Mondelez has been trying to expand into with products like breakfast biscuits (Belvita) and the Good Thins brand, launched in March.
E-commerce and digital efforts also continue to play an integral role in Mondelez's growth strategy. In addition to the Tmall.com store in China, Mondelez has launched other efforts in the U.S., including the Oreo Colorfilled promotion around the holidays and most recently, a new partnership with Facebook to create mobile-first experiences using consumer insights and fast-growing messaging apps.
While Mondelez was able to expand its adjusted operating income margin, nonadjusted operating income margin was down 90 basis points to 10.1%. Mondelez's profitability has taken a hit in recent quarters from divestments, so it's unclear how investors will read into the numbers and whether they will continue to suggest Mondelez sell itself.
Mondelez is hosting its second-quarter earnings call later today.