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Mondelez (MDLZ) Q4 Earnings Miss Estimates, Revenues Beat Y/Y

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Mondelez International, Inc. (MDLZ - Free Report) reported fourth-quarter 2021 numbers, wherein the top and bottom lines increased year over year and the former cruised past the Zacks Consensus Estimate. The company continued to benefit from its strategic efforts, with a volume-induced top-line improvement, robust profit, higher investments in brands and capacities and a solid free cash flow generation.

In 2021, management solidified its business with prudent buyouts and remains confident that its brands and a focus on the execution and strategy keep it well-placed for growth to stay firm amid the near-term volatility.

Quarterly Performance

Adjusted earnings came in at 71 cents per share, which increased 9.1% year over year on a constant-currency or cc basis. The metric came a penny less than the Zacks Consensus Estimate. The year-over-year upside was backed by reduced outstanding shares, lower income taxes and greater earnings from equity method investments.

Net revenues advanced 4.9% to $7,658 million and surpassed the Zacks Consensus Estimate of $7,540 million. The uptick was driven by strong organic net revenues of 5.4% as well as increased sales from the Hu, Grenade and Gourmet Food buyouts, somewhat negated by currency headwinds. Favorable volumes and pricing contributed to organic net revenues.

Revenues from emerging markets increased 8.8% to $2,692 million while rising 11.1% on an organic basis. Revenues from developed markets moved up 2.9% to $4,966 million while increasing 2.5% on an organic basis.
 
Region-wise, revenues in Latin America, Asia, Middle East & Africa, Europe and North America increased 12.4%, 7.1%, 5.5% and 0.6% year over year, respectively. On an organic basis, revenues increased 19.7%, 5.8% and 6.5% in Latin America, Asia, Middle East & Africa and Europe, respectively, and dipped 0.3% in North America.

Adjusted gross profit ascended $21 million at cc. Adjusted gross profit margin contracted 200 basis points (bps) to 37.2% due to increased raw material and transportation costs as well as an unfavorable mix. These were somewhat negated by favorable pricing, volume leverage and manufacturing productivity.

The company’s adjusted operating income fell $52 million at cc. Adjusted operating income margin contracted 90 bps to 15.4% due to increased raw material and transportation costs as well as an adverse mix. These were somewhat offset by pricing actions, manufacturing productivity and reduced SG&A expenses.

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Other Financials

Mondelez ended the quarter with cash and cash equivalents of $3,546 million, long-term debt of $17,550 million and total equity of $28,323 million. MDLZ generated net cash from operating activities of $4,141 million during the 12 months ended Dec 31, 2021. Free cash flow was $3.2 billion during the same period.

Management expects free cash flow of more than $3 billion in 2022.

During the fourth quarter, the company distributed $0.8 billion to shareholders through cash dividends and share buybacks. In full-year 2021, the company incurred $3.9 billion for dividends and buybacks.

Guidance

For 2022, management expects organic net revenues of more than 3% and a high single-digit increase in adjusted earnings per share or EPS at cc. These projections go in tandem with the company’s long-term algorithms. Currency movements are likely to negatively impact net revenues by nearly 2.5% and adjusted EPS by 8 cents. Management stated that the guidance is based on higher-than-normal volatility due to the pandemic.

Shares of this Zacks Rank #3 (Hold) company have increased 11.1% in the past three months compared with the industry’s growth of 2.4%.

Other Hot Consumer Staple Bets

Some top-ranked stocks are Helen of Troy (HELE - Free Report) , United Natural Foods (UNFI - Free Report) and Medifast, Inc. (MED - Free Report)

Helen of Troy, a designer, developer, marketer, importer and distributor, carries a Zacks Rank #1 (Strong Buy) at present. Shares of Helen of Troy have dipped 7.6% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Helen of Troy’s current financial-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the year-ago reported number. HELE has a trailing four-quarter earnings surprise of 19.1%, on average.

United Natural Foods, a distributor of natural, organic, specialty, produce, and conventional grocery and non-food products, carries a Zacks Rank #1. Shares of United Natural Foods have moved down 15.4% in the past three months.

The Zacks Consensus Estimate for United Natural Foods’ current financial-year sales and EPS suggests growth of 5.1% and 8.8%, respectively, from the year-ago reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average.

Medifast, the manufacturer and distributor of weight loss, weight management, healthy living products, and other consumable health and nutritional products, currently carries a Zacks Rank #2 (Buy). Shares of Medifast have dropped 4.1% in the past three months.

The Zacks Consensus Estimate for Medifast’s current financial-year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.