Mondelez's (NASDAQ:MDLZ) Posts Q4 Sales In Line With Estimates
Packaged snacks company Mondelez (NASDAQ:MDLZ) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 7.1% year on year to $9.31 billion. It made a non-GAAP profit of $0.84 per share, improving from its profit of $0.71 per share in the same quarter last year.
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Mondelez (MDLZ) Q4 FY2023 Highlights:
Market Capitalization: $103 billion
Revenue: $9.31 billion vs analyst estimates of $9.30 billion (small beat)
EPS (non-GAAP): $0.84 vs analyst estimates of $0.77 (8.5% beat)
Free Cash Flow of $1.23 billion, up 38.1% from the previous quarter
Gross Margin (GAAP): 37.3%, up from 35.4% in the same quarter last year
Organic Revenue was up 9.8% year on year
Sales Volumes were down 0.4% year on year
“Our 2023 results underscore the strength of our execution, the importance of our investments and the resiliency of our portfolio, footprint, categories, and brands. We delivered double-digit top-line and earnings growth for the year, leading to strong cash flow generation and capital return to shareholders. Our growth was balanced across developed and emerging markets, with robust performance in all regions," said Dirk Van de Put, Chairman and Chief Executive Officer.
Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Packaged Food
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods, prepared meals, or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences.The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales Growth
Mondelez is one of the most widely recognized consumer staples companies in the world. Its influence over consumers gives it extremely high negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don't have).
As you can see below, the company's annualized revenue growth rate of 10.7% over the last three years was impressive as consumers bought more of its products.
This quarter, Mondelez grew its revenue by 7.1% year on year, and its $9.31 billion in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 4.2% over the next 12 months, a deceleration from this quarter.
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Key Takeaways from Mondelez's Q4 Results
It was good to see Mondelez beat analysts' EPS and gross margin expectations this quarter. Its organic revenue growth was in line with estimates, but looking under the hood, we can see its sales volumes missed (0.4% year-on-year decline vs estimates of 1.8% growth) while its average price per sale beat (9.8% year-on-year growth vs estimates of 8.2% growth). Looking at areas of underperformance, its operating margin and free cash flow missed analysts' expectations, and its full-year 2024 organic revenue and free cash flow guidance fell short of Wall Street's projections. Overall, the results could have been better. The company is down 3.1% on the results and currently trades at $73.99 per share.
Mondelez may not have had the best quarter, but does that create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
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