Is Mondelez's Pricing Power Enough to Offset Cocoa Cost Surge?

Mondelez International, Inc. (MDLZ) entered the second quarter of 2025 facing intense cocoa cost inflation, but its pricing power played a pivotal role. Organic net revenues rose 5.6%, fueled by a 7.1 percentage point contribution from pricing, while volume/mix slipped 1.5%. Chocolate, in particular, saw significant price increases and revenue growth management moves that landed largely as planned.

Yet even with strong pricing execution, adjusted gross profit margin contracted 680 basis points year over year to 33.7%, due to higher raw material, transportation costs and unfavorable product mix. Management reaffirmed that 2025 adjusted EPS will decline roughly 10% at constant currency, citing cocoa inflation as the key driver.

Mondelez is implementing another round of incremental pricing in North America. Rather than targeting only cocoa-intensive products, the company is applying more limited increases broadly across its portfolio, while protecting key formats that consumers favor. It has also introduced multi-wave pricing actions in major emerging markets, including new price points in India and Brazil.

On the cost side, Mondelez is seeing material relief in cocoa butter prices, which have dropped to about half last year’s peak levels. However, cocoa bean prices remain historically high. Favorable West African crop conditions and strong pod counts point to easing into 2026, and despite low industry stock levels, management expects cocoa prices to eventually decline sooner or later.

Mondelez’s global presence and brand portfolio are supporting efforts to offset higher cocoa costs through pricing, though margins remain constrained. A full recovery in profitability will depend on a combination of pricing actions and easing input costs over time.

Mondelez’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 9.2% in the past month compared with the industry’s 3.5% decline. MDLZ has also underperformed the broader Consumer Staples sector and the S&P 500 index’s growth of 0.2% and 2.1%, respectively, during the same period.

MDLZ Stock's Past Month Performance

Is MDLZ a Value Play Stock?

Mondelez currently trades at a forward 12-month P/E ratio of 19.02 compared with the industry average of 15.59 and the sector’s 17.19. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.

MDLZ Valuation Picture

Estimate Revisions Favor MDLZ Stock

The positive sentiment surrounding MDLZ is reflected in the upward revisions in the Zacks Consensus Estimate for earnings. In the past 30 days, the consensus estimate has moved up a cent to $3.03 per share for the current fiscal year and by 2 cents to $3.35 for the next fiscal year.

Stocks to Consider

Post Holdings, Inc. (POST) operates as a consumer-packaged goods holding company in the United States and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 2.8% and 10.9%, respectively, from the prior-year levels. POST delivered a trailing four-quarter earnings surprise of 21.4%, on average.

The Chefs' Warehouse, Inc. (CHEF) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.

The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6.4% and 19.1%, respectively, from the prior-year levels.

Ingredion Incorporated (INGR) manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials to a range of industries worldwide. It holds a Zacks Rank # 2 at present. INGR delivered a trailing four-quarter earnings surprise of 11.1%, on average.

The Zacks Consensus Estimate for Ingredion’s current fiscal-year earnings implies growth of 6.7% from the year-ago number.

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This article originally published on Zacks Investment Research (zacks.com).

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