- Mondelez, the maker of Oreos, Triscuits, Milka chocolate and Trident gum, posted a 2.1% increase in third-quarter revenue to $6.53 billion compared to the same period a year ago. In North America alone, sales rose 1.3% to $1.775 billion, a sign that its focus on snacks may be helping the company in what is a challenging environment for CPG manufacturers. The company posted a profit of $992 million during the period.
- Company executives noted the hangover from the June malware incident lingered into the third quarter. Chief Financial Officer Brian Gladden said the company expects 1% organic net revenue growth given the larger-than-expected impact from the malware problem.
- Overall, Mondelez said the long-term outlook is improving for the company. "We’re encouraged as we see macro trends that have been headwinds over the past several quarters turn more favorable,” Chief Executive Irene Rosenfeld, who is stepping down on Nov. 20, told The Wall Street Journal.
Mondelez has been busy innovating this year and has introduced new brands such as Véa crackers and belVita breakfast cookies. It also launched a bunch of new Oreo flavors — jelly donut, fireworks, coconut, salted caramel, waffles & syrup and Mississippi mud pie — and announced its entire line of Triscuit snack crackers was Non-GMO Project Verified. The continued strength of these and other "power brands" with a focus on snacking, a trend that is increasingly popular with consumers, helped push up revenues during the third quarter.
According to a Seeking Alpha transcript, analysts asked several questions during Monday's earnings call about lagging performance by the company's North America unit and about what Rosenfeld expects going forward. North American sales nudged up slightly to 1.3% for the quarter, although the company posted stronger sales in its Latin America and Europe operations.
Rosenfeld acknowledged the only region performing below expectations was North America, but there was some positive growth in the third quarter and progress was being made in addressing challenges, including recovery from the malware incident. The U.S. has been struggling as consumers turn away from center-of-the-store items in favor of products of healthier, fresher and organic products. That has been difficult for big CPG companies such as Campbell Soup and General Mills, despite efforts by both firms to acquire or develop brands that meet these changing consumer preferences.
Mondelez is facing some big executive changes in the near future. Rosenfeld is stepping down and new CEO Dirk Van de Put is coming on board next month. Van de Put, a native of Belgium, has most recently been CEO of Canadian-based McCain Foods, but also has worked at Danone, Coca-Cola and Mars. Mondelez also announced last week that Glen Walter will be the next president of its North American business.
Mondelez has focused its efforts on building an e-commerce snacks business. The food manufacturer also has pursued health initiatives such as reducing sodium and saturated fat in its snacks. Rosenfeld said during the Monday earnings call that the company's e-commerce efforts were showing especially strong progress, reinforcing its belief in strong growth in that area.
"In fact, our U.S. e-commerce net revenues have grown more than 70% year-to-date and our China e-commerce business grew at twice the growth rate of the online market," she said.
Mondelez appears to be setting itself on a more stable path — featuring new initiatives and incoming seasoned personnel — designed to spark continuing growth in the coming months and years. Still, Van de Put promises to have a challenging road ahead as consumer preferences continue to change and big companies like Mondelez need to find ways to quickly respond.