Packaged snacks company Mondelez (NASDAQ:MDLZ) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 7.1% year on year to $9.31 billion. It made a non-GAAP profit of $0.84 per share, improving from its profit of $0.71 per share in the same quarter last year.
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Mondelez (MDLZ) Q4 FY2023 Highlights:
- Market Capitalization: $103 billion
- Revenue: $9.31 billion vs analyst estimates of $9.30 billion (small beat)
- EPS (non-GAAP): $0.84 vs analyst estimates of $0.77 (8.5% beat)
- Free Cash Flow of $1.23 billion, up 38.1% from the previous quarter
- Gross Margin (GAAP): 37.3%, up from 35.4% in the same quarter last year
- Organic Revenue was up 9.8% year on year
- Sales Volumes were down 0.4% year on year
Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Packaged FoodAs America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods, prepared meals, or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options.
Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences.The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales GrowthMondelez is one of the most widely recognized consumer staples companies in the world. Its influence over consumers gives it extremely high negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don't have).
As you can see below, the company's annualized revenue growth rate of 10.7% over the last three years was impressive as consumers bought more of its products.
This quarter, Mondelez grew its revenue by 7.1% year on year, and its $9.31 billion in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 4.2% over the next 12 months, a deceleration from this quarter.
Key Takeaways from Mondelez's Q4 Results It was good to see Mondelez beat analysts' EPS and gross margin expectations this quarter. Its organic revenue growth was in line with estimates, but looking under the hood, we can see its sales volumes missed (0.4% year-on-year decline vs estimates of 1.8% growth) while its average price per sale beat (9.8% year-on-year growth vs estimates of 8.2% growth). Looking at areas of underperformance, its operating margin and free cash flow missed analysts' expectations, and its full-year 2024 organic revenue and free cash flow guidance fell short of Wall Street's projections. Overall, the results could have been better. The company is down 3.1% on the results and currently trades at $73.99 per share.
