Mondelez International, Inc. (MDLZ Quick QuoteMDLZ - Free Report) reported third-quarter 2026 results, wherein the bottom line beat the Zacks Consensus Estimate, while the top line missed. Net revenues increased year over year, supported by volume growth and favorable currency movements.

Adjusted earnings were 78 cents per share, up 5.5% on a constant-currency (cc) basis. The metric beat the Zacks Consensus Estimate of 72 cents. The increase was driven by stronger operating performance and fewer outstanding shares, partially offset by higher income taxes, interest and other expenses, and lower equity-method investment earnings.

Net revenues rose 2.3% year over year to $9,967 million, missing the Zacks Consensus Estimate of $9,977 million. Organic net revenues increased 2.1% year over year, driven by favorable volume/mix and higher net pricing, contributing 1.8 and 0.3 percentage points, respectively. 

Volume/mix growth marked the strongest performance since the third quarter of 2023, reflecting improving commercial execution and investments in brands, innovation and distribution. The company recorded its third consecutive quarter of sequential volume/mix improvement, with all four regions delivering flat to positive performances. Growth was supported by resilient snacking demand, particularly in emerging markets, despite cautious consumer spending.

Mondelez's Segment Performance: Key Insights

Revenues from emerging markets increased 4.9% year over year to $4,072 million, with organic growth of 4.1%. Volume/mix contributed 2.2 percentage points, supported by India, China, Mexico and Southeast Asia.

Revenues from developed markets increased 0.5% to $5,895 million, with organic growth of 0.8%. Volume/mix improved 1.5 percentage points, reflecting solid North American performance and Europe's return to positive volume growth.

Region-wise, reported revenues rose 12% in Latin America, 8.2% in Asia, the Middle East and Africa (AMEA), and 1.1% in North America while declining 3.3% in Europe. On an organic basis, revenues increased 6.9% in Latin America, 7.7% in AMEA and 1.6% in North America while dropping 2.1% in Europe.

Biscuits and Baked Snacks recorded organic revenue growth of 2.2%, supported by Oreo, Ritz and the cakes and pastries portfolio. Chocolate grew 0.6%, benefiting from Cadbury innovation and improving European volumes. Gum and Candy posted 6.9% organic growth, supported by Sour Patch Kids innovation and gum strength in Latin America and China.

MDLZ's Adjusted Margin and Profitability Snapshot

Adjusted gross profit increased 14% at constant currency to $3,407 million on a reported-currency basis. Adjusted gross margin expanded 380 basis points to 34.2%, benefiting from lower raw material costs, manufacturing productivity, favorable volume/mix and higher net pricing.

Adjusted operating income rose 17% at constant currency to $1,384 million on a reported-currency basis. Adjusted operating margin expanded 190 basis points to 13.9%. Lower manufacturing costs and higher pricing supported profitability, partially offset by increased selling, general and administrative expenses and higher advertising and consumer promotion costs.

Mondelez's Financial Health Snapshot

MDLZ ended the quarter with cash and cash equivalents of $1,628 million and long-term debt of $16,351 million. For the nine months ended Sept. 30, 2026, net cash provided by operating activities totaled $2,606 million compared with $2,117 million in the year-ago period.

Free cash flow reached $1,659 million during the first nine months. Capital expenditures totaled $947 million compared with $881 million a year earlier.

The company returned $2,772 million to shareholders through dividends and share repurchases during the first nine months, comprising $1,927 million in dividends and $845 million in share repurchases.

MDLZ Reaffirms 2026 Outlook

For 2026, Mondelez reaffirmed its expectation of at least 2% organic net revenue growth. Management continues to project adjusted earnings growth ranging from flat to 5% on a constant-currency basis and free cash flow of approximately $3,000 million.

The company expects adjusted interest expense of approximately $350 million, an adjusted effective tax rate in the mid-20s and share repurchases of up to $2,000 million. Currency translation is expected to add approximately 1.5 percentage points to net revenue growth and about 4 cents to adjusted earnings per share.

Despite inflationary pressures and macroeconomic volatility, management continues to anticipate strong earnings growth in 2027, supported by improving volumes, productivity initiatives, cost savings and continued brand investments.

This Zacks Rank #3 (Hold) stock has risen 8.8% over the past year against the industry’s decline of 15.1%.

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