Oct 29 (Reuters) – Cadbury parent Mondelez International beat Wall Street expectations for third-quarter profit on Thursday, helped by lower raw material costs, even as consumer confidence remained soft in North America.
Shares of the Oreo maker rose 3% in extended trading.
A global cocoa surplus drove down the chocolate maker’s costs, easing margin pressures and giving it more room to lure shoppers with promotions and value packs.
“We’re seeing consumers respond positively where we’ve been able to reinvest in value,” CEO Dirk Van de Put said, adding that the company was seeing improving trends in several chocolate markets.
Still, Van de Put said consumer confidence in North America remained soft and was being pressured by higher energy prices.
The company also said it would buy Undercover Snacks, which makes chocolate-coated quinoa crisps, as it looks to expand in the fast-growing “permissible indulgence” snack category.
“Mondelez’s acquisition of Undercover Snacks could improve the company’s positioning in the better-for-you space, and attract spending from consumers willing to pay more for items with perceived health benefits,” eMarketer analyst Rachel Wolff said.
The Toblerone maker said pricing rose 0.3 percentage points in the quarter, while volumes increased 1.8 percentage points.
Mondelez, which raised prices when cocoa rallied over the past few years, has since cut prices on some chocolate products in Europe and is beginning to see sales volumes recover as consumers return to the category.
The company posted an adjusted profit of 78 cents per share for the quarter ended September 30, above analysts’ average estimate of 71 cents per share.
Its quarterly net revenue came in at $9.97 billion, slightly below analysts’ average estimate of $9.98 billion, according to data compiled by LSEG.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Diti Pujara)
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