Mondelēz International on Tuesday beat Wall Street expectations for third-quarter revenue and profit, as the Cadbury parent's efforts to provide its products at different price points drove a sequential improvement in sales volumes.
Demand for the company's products held steady, as the prices of its candies and biscuits ranging from $3 (€2.77) to $4 (€3.69) helped in appealing to customers, who have been going for cheaper alternatives.
The company's quarterly volumes rose 0.3 percentage point, while prices were up 5.1 percentage points.
Expanding Margins
Benefits from lower manufacturing costs and higher product prices further helped the Oreo biscuits maker in expanding its margins.
Its quarterly adjusted gross profit margin rose 230 basis points to 40.5%.
Packaged food companies are reducing prices to rebuild consumer trust and stimulate demand among budget-conscious shoppers who have been deterred by earlier price hikes driven by rising input costs.
Demand Recovery
Mondelēz echoed recovery in volumes as its peer General Mills, which saw demand improve in certain categories.
Strong demand recovery in regions including Europe, North America and resilience in emerging markets such as China, Brazil and India helped the Toblerone maker overcome dipping volumes in Latin America.
Shares of the company, which maintained its annual revenue and profit forecast were up about 3% after the bell.
Adjusted Profit
The company posted net revenue of $9.20 billion (€8.50 billion) in the reported quarter, compared with analysts' average estimates of $9.11 billion (€8.42 billion), according to data compiled by LSEG.
It reported an adjusted profit of 99 cents per share, topping estimates of 85 cents per share.
Mondelēz also said that it has agreed to acquire a majority stake in Evirth, a manufacturer of cakes and pastries in China.
