Mondelēz executives are hoping for the best in fiscal 2026 after a “solid start” to the year and “green shoots in several key markets,” but they say they also are bracing for harder times as the Middle Eastern conflict fuels “economic anxiety” among already financially strained consumers.
The sweets and snacks giant yesterday in an earnings call touted 3% revenue growth in its first quarter of 2026 and strong, sustained top-line growth of 6.3% organic net revenue growth and 0.5% volume/mix gains in emerging markets alongside stabilization in developed markets, where organic net revenue crept up 0.8% despite volume declines of 1.2%.
And yet, it reaffirmed, rather than raised, its outlook for the year, including topline growth that is expected to be flat to +2% and adjusted earnings per share expected to come in flat to as high as 5%.
CEO Dirk Van de Put characterized the assessment as a “prudent, risk-adjusted” response that “provides flexibility and enables substantial reinvestment to drive future top- and bottom-line growth” within the “dynamic and increasingly volatile geopolitical environment within which we operate.”
While the company has not seen a shift in consumer spending or behavior that suggests an impending slowdown in response to the conflict, the risk of a pullback is real if the conflict continues, Van de Put noted.
He explained that the aftereffects of the Middle Eastern conflict, if it continues, “is going to show in many areas like fertilizers, packaging, oil prices and so on. And the consumer will start to feel that probably with increased inflation. So, they are aware of that, they’ve see these sorts of situations” and “they are vigilant.”
He added consumer confidence in the US “remains quite low” and is expected to deteriorate as the Middle East conflict continues and compounds existing concerns about affordability, economic outlook and job security. While in Europe, he said, consumer confidence is “stable but its fragile,” as expected given the Middle East conflict.
The company also is absorbing higher costs related to the conflict, which influenced its decision to hold, rather than raise, its guidance.
“We need also to address some headwinds that we didn’t have in our original forecast, particularly as they stem out of the Middle East crisis. The team is managing that situation quite well, finding alternative routes to produce our brands and to deliver our brands, but that is coming at an extra cost and clearly the oil cost, albeit we are covered for the year, is having a little bit of on impact on the profitability,” Van de Put said.
He stressed that even though Mondelēz has the “Middle East situation in terms of extra costs under control,” the company had to confirm guidance on the bottom line “to be able to swallow it.”
Gains from innovations, activations encourage Mondelēz
The company’s long-term confidence for the year also is rooted in brand reinvestment, sharper price-pack architecture, product innovation and stabilization of key ingredients, including cocoa production and prices, which help counterbalance concerns about fallout from the Middle East crisis.
“Innovation remains an important part of our growth agenda and an important area of investment” across categories, Van de Put said in prepared comments.
He explained on the call that the current landscape is very different than during the COVID pandemic when in-home consumption was high or even at the beginning of the inflationary period when consumers had access to savings.
“We are now in a situation, as we know, where the consumer is a lot more anxious about how and where they are spending their money. Their basket is not going up. So, we believe that the way to approach that is in the first place, you need to hit the right price points on your core range” and make sure consumers can afford the products, Van de Put said.
In addition, he explained, Mondelēz wants to increase consumers’ value perception of its offerings and their brand loyalty which it is doing in part through increased store activations and innovations that stand out.
To execute this strategy well, he explained, Mondelēz is focused on “bigger and fewer bets, particularly improvement platforms.”
This includes base renovation to products, including new flavors, price-pack architecture adjustments and seasonal offerings. But it also includes launches that generate news in different categories.
For example, within chocolate, the company launched a new line of Milkinis in India, which Van de Put described as a “creamy twist on classic chocolate geared toward younger, on-the-go consumers.” The company also expanded its Biscoff range with a Cadbury Biscoff Egg and its Toblerone Very Limited Editions in its world travel retail business, including crispy caramel, pink crush and crunchy popcorn flavors, which were premium priced and sold out.
In biscuits and baked snacks, the launch of Ritz Drizzled, which includes classic Ritz crackers dipped in fudge or caramel, helped drive a 0.2 percentage point share gain year to date for the brand. Likewise, the company expanded its Perfect Snacks bar lineup with a bar packed with 20 grams of protein and 6 grams of fiber, including 3 grams of prebiotic fiber.
The company’s new Sour Patch Kids Chews also are growing about 1 percentage point year-to-date.
Cocoa stabilizes
Looking forward, Mondelēz executives also are taking comfort from stabilizing cocoa supply and prices – although they acknowledge there is room for uncertainty.
While cocoa cost phasing partially offset top-line growth and cost-discipline in the first quarter, Van de Put said he expects cocoa cost phasing to impact Q2 “to a lesser degree.”
He explained that at this stage, the company doesn’t see any movement in price happening and the “chocolate market is doing quite well.”
CFO Luca Zaramella explained that the mid-year crop was “quite positive” and the company is “encouraged” by early signs for next year’s crop as well.
Through a combination of this stabilization and reinvestment in marketing and innovation made possible by “prudent” financial planning and expectations, Mondelēz executives are optimistic they can deliver strong EPS in 2027 and weather any negative impacts from the Middle East conflict.
