Mondelez sales rise on strong consumer appetite

Oreo fans helped boost Mondelez International Inc.’s sales 2.1% to $6.1 billion in the latest quarter as the snack giant benefitted from a strong U.S. economy.

"Consumer confidence overall in the U.S. is pretty good," said Chief Executive Dirk Van de Put.

He said that while Mondelez doesn’t plan to raise prices as a result of tariffs, trade tensions could weigh on consumer spending more broadly if other companies make their products more expensive.

Mondelez raised its sales-growth outlook for the year to about 2%, excluding acquisitions, divestitures and foreign currency fluctuations, from a previous estimate of 1% to 2%.

The maker of Oreos, Wheat Thins and other snacks struggled along with its peers in recent years to generate sales growth in the U.S. as Americans swapped packaged foods for more fresh, natural alternatives.

Mondelez also was hit last year by a cyberattack that disrupted its ability to make deliveries, denting sales for several quarters. It took months to resolve the supply-chain and customer-service issues with retailers in North America, which accounts for one-quarter of the Deerfield, Ill., company’s revenue. Since resolving those disruptions, Mondelez’s comparable sales in North America rose 5.7% in the quarter.

Oreo Thins Bites and Ritz Crisp & Thins, in particular, have sold well, Mr. Van de Put said.

He said U.S. snack sales industrywide are up 3.1% this year, positioning Mondelez for growth domestically, as its business in emerging markets also benefits from growth in many of those countries. Globally, Mondelez’s comparable sales rose 3.5% in the quarter, including a 4.7% rise in emerging markets.

Mr. Van de Put, who joined Mondelez in November, has set a goal to boost the company’s adjusted profit margin to 17% this year, up from 16.3% last year. In the latest quarter, that metric came in at 16.7%. Mondelez said it has offset rising costs for some ingredients and transportation and doesn’t expect to raise prices for consumers this year.

Overall for the quarter, Mondelez’s profit rose 11% to $826 million, or 56 cents a share, excluding impacts of international currency fluctuations and certain one-time events. That topped analyst expectations of 54 cents a share, according to FactSet. Mondelez’s shares rose 3% after market hours Wednesday.

Mr. Van de Put also has been conducting a strategic review of the business, the results of which he will disclose in September. "There won’t be a major change of direction for the company, but our five-year plan needs to show more top-line growth," he said.

Write to Annie Gasparro at [email protected]

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