Mondelez Sinks 6% After Earnings: Here’s What You Need to Know

Mondelez International (NASDAQ: MDLZ | MDLZ Price Prediction) reported Q3 2025 earnings that met adjusted profit expectations but fell short on revenue, leaving investors underwhelmed.

Mondelez shares dropped 2.35% to $60.21 by close, erasing early gains as the market processed the miss alongside a sharp year-over-year earnings decline. In after-hours trading the story got worse, with shares down 5.75% as of 8 p.m. ET. 

The real story here is cocoa. Record-high inflation in cocoa costs squeezed margins hard, and while management signals relief ahead, the damage to this quarter’s profitability is stark.

Cocoa Costs Peak, But Relief May Be Coming

Mondelez delivered 3.4% organic net revenue growth and posted $9.74 billion in total revenue, missing consensus estimates of $9.91 billion by $170 million. That shortfall stung, but what hurt more was the earnings trajectory. Adjusted EPS of $0.73 met expectations on a reported basis, yet diluted EPS fell 9.5% to $0.57 year over year. On a constant currency basis, adjusted EPS declined 24.2%, a significant deterioration that reflects the brutal impact of record cocoa cost inflation.

The company returned $3.7 billion to shareholders via dividends and buybacks over the first nine months, showing continued confidence in the business. More importantly, management noted that Q3 represented peak cocoa costs for the year. CEO Dirk Van de Put stated the company is “encouraged by recent moderation in cocoa prices, as well as promising signs for a strong cocoa crop this fall.” That commentary matters. If cocoa prices stabilize, margin pressure should ease starting in Q4.

Revenue Miss Signals Demand Softness

The $170 million revenue miss wasn’t huge in percentage terms, but it signals demand isn’t accelerating as much as hoped despite organic growth of 3.4%. Gross profit came in at $2.61 billion, compressed by raw material costs that outpaced pricing actions. Operating income landed at $744 million, with operating cash flow of $2.12 billion through nine months. Free cash flow reached $1.24 billion for the nine-month period.

You’ll want to watch whether the company can improve volumes as it executes cost efficiencies. Management emphasized “clear plans for volume improvement” and “significantly increasing growth investments,” but execution risk remains high in a consumer environment where cocoa headwinds have limited pricing flexibility.

Key Figures

• Revenue: $9.74B (vs. $9.91B estimated); up 5.9%
• Adjusted EPS: $0.73 (met expectations); down 24.2% on constant currency
• Diluted EPS: $0.57 (vs. $0.73 in Q3 2024); down 9.5% year over year
• Gross Profit: $2.61B (pressured by record cocoa inflation)
• Operating Income: $744M
• Free Cash Flow (9 months): $1.24B
• Organic Revenue Growth: 3.4%

The 24.2% adjusted EPS decline on constant currency is the headline that matters most here. Cocoa costs are the culprit, but that’s also the variable that could reverse if commodity prices hold.

Guidance Reflects Cautious Outlook

For full-year 2025, management guided for organic revenue growth over 4% and adjusted EPS decline of approximately 15% on a constant currency basis. Free cash flow is expected to exceed $3 billion. The guidance essentially confirms that cocoa pressure will persist but moderate as the year progresses. That’s not inspiring, but it’s realistic.

Van de Put struck a cautiously optimistic tone, acknowledging “challenging conditions in some markets” while pointing to cocoa price moderation and crop prospects as reasons for encouragement. The company is betting on volume recovery and cost efficiencies to offset lingering commodity headwinds. It’s a reasonable bet, but execution matters.

What’s Next

Watch for specifics on volume trends and the pace of cocoa price normalization. If management signals stronger demand in developed markets and confirms cocoa costs are indeed moderating, the stock could stabilize. The 5.75% decline after-hours reflects disappointment, but it’s also a stock that’s already down 10.83% over the past year headed into earnings. The risk-reward depends on whether cocoa relief materializes and whether the company can drive meaningful volume growth in a consumer environment that’s been cautious.