Mondelez Is Stung by Coronavirus Lockdowns in Emerging Markets
July 28 2020 - 05:45PM
Dow Jones News
By Annie Gasparro
Mondelez International Inc. said tough lockdowns to fight the
coronavirus in emerging markets have hurt sales of its cookies and
snacks.
Comparable sales for the maker of Oreo cookies, Toblerone
chocolate and Ritz crackers rose 11% in North America in its latest
quarter. But in Latin America, where coronavirus cases have
multiplied rapidly, sales by that metric fell 11%, Mondelez said
Tuesday. In its Asia, Middle East and Africa division, where some
countries have imposed stricter social distancing regulations than
in North America, comparable sales decreased 3%.
Mondelez shares were flat Tuesday in after-hours trading at
$55.64.
Mondelez Chief Executive Dirk Van de Put said the company's
emerging markets business improved during the quarter as store
closures eased and more consumers were able to access its
snacks.
Food companies in the U.S. have been inundated with orders from
grocery stores since the pandemic exploded in March. In a country
where a lot of people are staying home and can afford to stock up
on food, the coronavirus has buoyed sales for the food
industry.
But Mondelez has benefited less than its U.S.-centric rivals
such as Campbell Soup Co. and Conagra Brands Inc.
Mondelez has also spent more to ramp up production to meet the
unprecedented demand in regions such as North America. Mondelez
said Covid-19-related costs, higher prices for raw materials and
unfavorable exchange rates contributed to a lower profit margin in
the latest quarter.
In the latest quarter, Mondelez's total revenue fell 2.5% to
$5.9 billion, in line with analysts' estimate, according to
FactSet. Adjusted profit of 63 cents a share -- a 16% increase from
the prior year excluding currency fluctuations -- topped analysts'
projection of 56 cents a share.
Write to Annie Gasparro at annie.gasparro@wsj.com
(END) Dow Jones Newswires
July 28, 2020 17:30 ET (21:30 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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