Mondelēz posts revenue growth amid record cocoa inflation pressures

Mondelez International reported 5.9% net revenue growth in its third quarter despite facing what the company describes as record-high cocoa cost inflation, with the period marking peak cost pressures for the year.

The company raised its full-year revenue outlook to above 4% growth, but expects adjusted EPS to fall about 15%, while emphasizing volume recovery, investment in growth, and continued cost efficiencies.

The snack giant posted net revenues of US$9.7 billion for the quarter (ending September 30), though adjusted earnings per share declined 24.2% on a constant currency basis to US$0.73.

The Chicago-based company achieved 3.4% organic net revenue growth driven by 8% pricing increases, which partially offset a 4.6% decline in volume and product mix. Cocoa inflation significantly impacted profitability, with adjusted gross profit margin falling 1,010 basis points to 30.4%, due primarily to higher raw material and transportation costs.

“We delivered solid top-line growth despite the impact of record-high cocoa cost inflation, with the third quarter representing peak costs of the year,” says Dirk Van de Put, chair and CEO at Mondelez. 

“Although we anticipate challenging conditions to continue in some markets, we are encouraged by recent moderation in cocoa prices, as well as promising signs for a strong cocoa crop this fall.”

Pressure on Europe 

The company’s Europe region saw the most pronounced margin pressure, with adjusted segment operating income margin declining 14.7 percentage points year-over-year. North America’s adjusted operating income dropped 7.9% despite the segment maintaining its highest margin at 19.4%.

Mondelēz returned US$3.7 billion to shareholders through dividends and share repurchases in the first nine months of 2025. Year-to-date cash provided by operating activities was US$2.1 billion, with free cash flow of US$1.2 billion.

The manufacturer updated its full-year outlook, now expecting organic net revenue growth above 4% and adjusted earnings per share to decline approximately 15% on a constant currency basis. 

Van de Put says the company’s teams are executing plans for volume improvement and significantly increasing growth investments while driving cost efficiencies.

Currency translation is expected to increase 2025 net revenue growth by roughly 0.5% and boost adjusted earnings per share by US$0.05, according to the company. The outlook doesn’t account for potential changes to trade under the US-Mexico-Canada Agreement, which governs trade among the three countries, and any future changes could affect Mondelez’s cross-border costs and supply chain dynamics.

Cocoa-free alternatives proliferate 

Cocoa prices have soared to record highs in recent years, and despite forecasts predicting a gradual decline, retail prices in Europe rose by over 50% since 2021, according to a Rabobank report. 

This week, Barry Callebaut entered a partnership with German fermentation specialist Planet A Foods to scale ChoViva, a cocoa-free chocolate alternative. The group is aiming to broaden its range of cocoa-free chocolate solutions amid the volatility in the cocoa market, which has impacted its recently released annual earnings report.

Meanwhile, Cargill has released NextCoa, a cocoa-free alternative to chocolate, in partnership with food tech company Voyage Foods. The company says the move is aimed at bringing prices down for consumers who want to source environmentally sustainable chocolate alternatives.