CHICAGO — Mondelez International posted improved bottom- and top-line results for the fiscal 2024 third quarter, but executives said a late-year surge in cocoa prices has stirred a stiff headwind for chocolate heading into 2025.

For the quarter ended Sept. 30, net income fell 13.3% to $853 million, equal to 63¢ per share on the common stock, from $984 million, or 72¢ per share, a year earlier. Adjusted earnings rose 25% to $1.33 billion, or 99¢ per share, from $1.06 billion, or 77¢ per share, in the prior-year period.

Mondelez’s third-quarter adjusted earnings per share also surpassed analysts’ top-end estimate of 90¢.

“We remain diligent in driving progress against our long-term growth strategy, focused on our core categories of chocolate, biscuits and baked snacks,” Dirk Van de Put, chairman and chief executive officer of Mondelez, told analysts in an Oct. 29 conference call. “These core categories continue to show strong consumption, and on top consumers remain very favorable to our iconic portfolio, as such generating significant headroom opportunities. The strong fundamentals, combined with our advantaged geographic footprint, keep on giving us confidence that we are well-positioned to compound long-term sustainable growth.”

Mondelez’s third-quarter net revenue totaled $9.2 billion, up 1.9% from $9.03 billion a year ago. Performance was mixed across regions, with reported net revenue decreases in North America and Latin America versus sturdy gains in Europe and the Middle East, Asia and Africa.

“We’re continuing to reinvest in our brands, expand distribution, drive M&A and scale sustainable snacking,” Van de Put said. “We remain on track to deliver 90% of revenue through our core categories of chocolate, biscuits and baked snacks by 2030. And our teams continue to deliver strong progress against our strategic agenda.”

On an organic basis, companywide net revenue rose 5.4% as all regions posted solid gains. Overall volume/mix accounted for 0.3 percentage points of that gain, while pricing accounted for 5.1 points.

“We held or gained share in 35% of our revenue base, with solid results in chocolate as well as in gum and candy,” said Luca Zamarella, chief financial officer. “This trend was partially offset by our US biscuit business, which accounts for approximately 25% points of revenue. We expect the total share metric to improve moving forward.”

The third-quarter top-line gains followed a 1.9% decrease in reported net revenue and a smaller 2.5% increase in organic net revenue in the second quarter.

On the product front, Van de Put cited the August launch of Oreo Coca-Cola Cookies in North America as a third-quarter highlight.

“These types of investments not only enable us to stay top of mind for consumers, but also to strengthen partnerships with key retailers,” he said. “Along with these marketing activations, we are continuing to strengthen store availability, visibility and execution around the world.”

Van de Put also pointed to Mondelez’s acquisitions of Give & Go, Chipita Global, and, most recently, Chinese baking company Evirth as growth catalysts.

“We are continuing to harness the power of acquisition to capture synergies and drive growth,” he said.

In North America, Mondelez saw net revenue dip 0.7% in the third quarter to $2.83 billion from nearly $2.85 billion a year ago. Organic net revenue climbed 3.7%. Operating income jumped 73% year over year to $918 million but, on an adjusted basis, was up 6.3% to $593 million. The region’s operating profit margin rose 13.8 percentage points to 32.5%, with the adjusted margin up 500 basis points to 21%.

“In North America, consumer confidence remains stable, despite continuing concern with overall grocery prices,” Van de Put said. “Biscuit category volume is improving to flat to slightly up over the last three months. In the United States, private label volume share is declining, demonstrating that consumers remain loyal to their favorite brands and that our price-pack architecture is working. As a result, our two largest US brands — Oreo and Ritz — are gaining share year-to-date.”

Zamarella noted that the organic revenue gain in North America came atop double-digit growth in the year-ago period.

“Solid performance in growth channels, distribution gains and impactful brand activations like the Oreo Coca-Cola partnership drove Q3 growth,” he said. “New price packs for Oreo, Ritz and Chips Ahoy! that will provide better representation in the $3-to-$4 range are just beginning to hit retail shelves now. North America (Chips) Ahoy! increased 6.5%.”

Mondelez reaffirmed its previous guidance for full-year 2024 organic net revenue growth “at the upper end” of a 3% to 5% range, with adjusted EPS in constant currency rising by high single digits. However, Van de Put and Zamarella said the fourth-quarter jump in cocoa prices presents a challenge to the bottom line going into next year.

“While the temporary cost increase of cocoa will put pressure on our margins, we will continue to invest in tools that strengthen brand loyalty and accelerate growth,” as well as “strong investments” in working media, Van de Put said. “We remain confident that we are well-equipped to appropriately manage input cost headwinds and to emerge stronger.”

Zamarella said the market is “still showing signs of nervousness” from tight physical availability ahead of the new cocoa crop. He described the pricing surge as “a bit of an anomaly as we procure cocoa for Q4 close to peak if not at peak prices,” adding that Mondelez “will not yet have the benefit of either additional pricing or planned cocoa savings initiatives in Q4.”

“While next year cocoa will be significantly higher than the average of 2024, it is projected to be lower than Q4 2024,” he said.

Mondelez expects the impact from peak cocoa pricing to be reflected in the 2025 first half, with chocolate margins improving sequentially from the 2024 fourth quarter.