CHICAGO — Mondelez International forecast “unprecedented cocoa cost inflation” to shrink adjusted earnings per share by about 10% in fiscal 2025, after revenue ticked up and earnings tamped down in fiscal 2024.

Net income for the year ended Dec. 31, 2024, came in at $4.61 billion, equal to $3.42 per share on the common stock, down from $4.96 billion, or $3.62 per share, from fiscal 2023. On an adjusted basis, 2024 net earnings were $4.52 billion ($4.68 billion in constant currency), or $3.36 per share ($3.48 in constant currency), up from $4.22 billion, or $3.08 per share, a year earlier. Wall Street’s consensus estimate had Mondelez’s fiscal 2024 adjusted EPS at $3.43.

“2024 was another strong year for Mondelez,” Dirk Van de Put, chairman and chief executive officer, told analysts in a Feb. 4 conference call. “We delivered balanced top-line growth, strong earnings and robust free cash-flow generation while returning significant capital back to shareholders. Our top line grew mid-single digits with balanced performance across both developed and emerging markets, and we delivered positive volume/mix in the second half of the year, with improved shared performance.”

Full-year earnings got a lift in the 2024 fourth quarter, as net income rose to $1.75 billion, or $1.30 per share, from $950 million, or 70¢ per share, a year ago. But adjusted earnings declined to $868 million ($918 million in constant currency), or 65¢ per share (69¢ in constant currency), from $1.12 billion, or 82¢ per share, in the 2023 quarter. Analysts, on average, had projected 2024 fourth-quarter adjusted EPS of 66¢.

“Despite continuing input cost inflation, we achieved gross-profit dollar growth in the mid-single digits, driven by ongoing cost discipline and sound pricing,” Van de Put said of fiscal 2024 results. “This allows us to continue to increase our investments in brands, distribution and organizational capabilities.

“As we transition into 2025, we remain focused on executing with excellence against our long-term growth strategy. We are confident that our chocolate playbook will enable us to successfully navigate unprecedented cocoa cost inflation.”

Prepared for cocoa price headwind

Chicago-based Mondelez had said it was readying for a cocoa pricing spike when reporting third-quarter results at the end of October. The company said the approximately 10% hit to 2025 adjusted EPS in constant currency also will be accompanied by an estimated 12¢-per-share negative impact from currency translation.

Luca Zaramella, chief financial officer, said the cocoa market continues to show volatility despite a “good main crop” and has reverted to elevated pricing during much of the past three months. He said in the call that the projected 10% adjusted EPS decline from cocoa compares with the base of 3.36% in 2024 and excludes the company’s sale of its stake in coffee and tea company JDE Peet’s from equity income.

“We expect an adjusted EPS decline this year given the unprecedented levels of cocoa costs in our chocolate P&L,” Zaramella said. “This outlook does not include the impact of the potentially significant new executive orders (from President Trump), imposing 25% tariffs on US imports from Mexico and Canada. This would create an additional headwind to the business. But given the fluid and rapidly changing nature of timing, it is difficult to provide a reliable estimate of impact for the full year at this time.

“Overall, we believe this outlook is a prudent planning stance based on our visibility to cocoa cost in 2025, which is substantially protected and hedged at this point.”

In 2025, Mondelez aims to take a “responsible and thoughtful approach to maintaining the health of the chocolate category” while trying to “strike the right balance by running a reasonable P&L,” Zaramella said.

“We do expect EPS growth in 2026 based on cocoa levels staying elevated but stable,” he explained. “Cocoa futures might come down, but we’re not there yet. So we will continue to plan various scenarios with the base case for a continuation of elevated levels. If cocoa stays high, we would expect to gradually price more. If cocoa starts to come down, then we would expect earnings delivery to be higher.”

Sales growth expected to pick up

Amid the cocoa pricing pressure, Mondelez projects organic net revenue growth of about 5% for 2025.

“For the current year, we expect to deliver on our long-term algorithm for revenue,” Zaramella said. “We have planned for higher levels of elasticity in chocolate, but we need to remain agile and assess the situation as new prices get implemented.”

Mondelez tallied fiscal 2024 net sales of $36.44 billion, up 1.2% from $36.02 billion a year earlier. On an organic basis, companywide net revenue rose 4.3% on a 5.3% gain in pricing and a 1% dip in volume/mix. All regions — Europe; the Middle East, Asia and Africa; North America; and Latin America — generated single-digit organic revenue growth, but the latter two saw decreases in reported revenue.

“We delivered organic net revenue growth of 4.3% and adjusted gross profit dollar growth of 5.1% for the year,” Van de Put said. “Our volume/mix results demonstrate that consumers continue to prioritize our brands and our categories. It is important to underscore that we continue reinvesting in our brands to drive faster growth. Our high-single-digit investment increase in A&C (advertising and consumer) continues to strengthen consumer and customer loyalty to our brands.”

Fourth-quarter net revenue advanced 3.1% to $9.6 billion from $9.31 billion a year ago. Organically, revenue rose 5.2% on increases of 5.1% in pricing and 0.1% in volume/mix. All regions saw reported and organic revenue growth in the quarter except for Latin America, where reported revenue fell 7.2%.

Mondelez’s fourth-quarter net revenue for North America inched up 0.1% year over year to $2.78 billion, with organic growth of 0.4% on a 1.3% rise in volume/mix and a 0.9% decrease in pricing. Full-year net revenue for the region, however, declined 1.5% to $10.91 billion, with organic growth of 1.5% driven entirely by pricing.

“In North America, consumer confidence has improved slightly following the US election, despite continuing concern about the economic outlook,” Van de Put told analysts. “While biscuit category volume remained relatively flat over the last three months, private label continues to decline, demonstrating that consumers remain loyal to their favorite brands and that our price-pack architecture initiatives are showing promising signs. As a result, Oreo, Chips Ahoy! and Ritz all are regaining share.”

Where will cocoa end up?

Looking ahead, Zaramella said he expects the elevated cocoa costs to eventually come down, though that’s not likely this year.

“Although we cannot predict specific timing, we continue to believe that the inverted nature of the market, combined with lower demand levels due to higher pricing and elasticity, will eventually bring cocoa to a more sustainable price level,” he said. “We have been planning our ’25 business for some time now in advance of elevated (price) levels of cocoa, and we have developed a clear and comprehensive chocolate strategy. This includes leveraging a robust RGM (revenue growth management) playbook, strong marketing and sales execution, remaining agile with the right incentives and targeted cost savings.”

After price adjustments in certain European markets in the 2024 fourth quarter, Mondelez is “planning on multiple price increases during 2025,” including in the first and second quarters, again with a focus on Europe, said Robert Moskow, an analyst with TD Cowen.

“Depending on cocoa price trends, they may consider a third increase for September and October,” he said in a Feb. 5 research note.

Moskow cited Mondelez management’s “highly bifurcated” outlook for 2026 of outsized EPS growth if cocoa futures “normalize lower from their record highs” and modest EPS growth if futures stay elevated.