Mondelez International (MDLZ) Q4 2025 earnings summary

Executive summary

• Net revenues grew 5.8% year-over-year to $38.5 billion, with organic net revenue up 4.3% driven by higher pricing, partially offset by a 3.7% decline in volume/mix and significant commodity cost headwinds.

• Achieved 5.1% organic net revenue growth in Q4 2025, driven by cocoa-led pricing, partially offset by volume/mix declines.

• Chocolate strategy in 2025 focused on price increases and revenue growth management, with strong execution in key markets like India, Brazil, Australia, and South Africa, and mixed results in Europe due to higher elasticity in northern markets.

• Adjustments for 2026 include targeted price points, increased brand investment, and innovation, especially with Biscoff collaboration, to restore consumption frequency and quantity.

• Sudden cocoa price decline introduces short-term pressures and potential competitive reactions, but benefits are expected for 2027 as coverage for 2026 is already set at higher prices.

Financial highlights

• Q4 2025 organic net revenue growth: +5.1% (price +9.9pp, vol/mix -4.8pp); FY 2025: +4.3% (price +8.0pp, vol/mix -3.7pp).

• FY 2025 free cash flow reached $3.2B, with $4.9B returned to shareholders via dividends and share repurchases.

• Gross profit decreased by $3.3 billion year-over-year, with gross margin dropping 1,070 basis points to 28.4% due to unfavorable mark-to-market impacts and higher raw material costs.

• $500 million one-time inventory adjustment in Q1 2026 due to pipeline cost changes in cocoa.

• Adjusted operating income grew 22.1% in Q4; adjusted EPS up 4.6%.

Outlook and guidance

• FY 2026 organic net revenue growth expected to be flat to +2%, with adjusted EPS growth (constant FX) projected flat to +5%.

• Free cash flow is projected at approximately $3 billion, with inflation expected to be high single digits as a percentage of COGS.

• Guidance is prudent, reflecting short-term pressures in the U.S. and stable chocolate category in Europe post-price increases.

• Flexibility built into guidance due to uncertain competitive responses to cocoa price drop.

• Net price-cost relationship in chocolate for 2026 expected to be neutral to slightly positive, with real profit recovery anticipated in 2027 as cocoa resets lower.