Core Insights - Mondelez International is a global leader in the snack food industry with a strong brand portfolio including Oreo, Cadbury, and Toblerone, operating in over 150 countries [1][6] - Berenberg Bank has set a price target of $70 for Mondelez, indicating a potential price increase of approximately 10.81% from its current trading price of $63.17, reflecting confidence in the company's market position [2][6] - The company has a dividend yield of 3.2%, which is attractive to income-focused investors, and is experiencing robust top-line growth, particularly in emerging markets and the chocolate segment [3][6] Financial Performance - Mondelez anticipates a 5% sales growth for the year, driven by resilient demand and market share gains, with potential normalization of cocoa prices supporting this growth [4] - The current stock price is $63.17, reflecting a 1.12% increase, with a market capitalization of approximately $81.74 billion [4] - Over the past year, Mondelez's stock has shown volatility, reaching a high of $72.70 and a low of $53.95, with a trading volume of 6,258,629 shares on the day [5]

Core Insights - The J. M. Smucker Company (SJM) experienced uneven results in fiscal 2026, with the Pet Foods segment significantly impacting overall performance [1] - The Pet Foods segment faced challenges, including a decline in sales and profit, primarily due to issues in the dog snacks category and the loss of a contract manufacturing agreement [2][3] - Other segments, such as Away From Home and coffee, showed growth, indicating potential for expansion despite the struggles in Pet Foods [4] Financial Performance - Pet Foods segment sales decreased by 8% to $368 million, with profit down 12% to $101.3 million [2][7] - The adverse impact on net sales was attributed to an 8-percentage point decline in volume/mix, while net price realization remained neutral [2] - Margins contracted by 130 basis points to 27.5% in the Pet Foods segment [2] Market Position and Competitors - J.M. Smucker competes with General Mills (GIS), The Kraft Heinz Company (KHC), and Mondelez International (MDLZ) [5] - The company anticipates fiscal 2026 net sales growth in the range of 3-5%, with comparable net sales expected to rise approximately 4.5-6.5% [5] - Competitors' projections for organic net sales growth vary, with General Mills expecting a range from a 1% decline to a 1% increase, Kraft Heinz projecting a decline between 1.5% and 3.5%, and Mondelez International forecasting around 5% growth [5]

Financial Data and Key Metrics Changes - The company reaffirmed its full year 2025 organic sales growth guidance of about 5% despite headwinds from U.S. retailer restocking and hot weather in Europe impacting chocolate demand [9][10] - Organic sales in North America declined about 3.5% year over year in the first half, with underlying trends softer than anticipated [13][19] - The company expects a reasonable P&L for 2025 with top-line growth of 4% to 5% and a 10% EPS decline, indicating a challenging year ahead [6][7] Business Line Data and Key Metrics Changes - The company noted that chocolate consumption in Europe was impacted by hot weather, particularly in the U.K. and Germany, leading to a decline in volumes [10][11] - In North America, the company is focusing on optimizing shopping trips and maximizing brand presence, particularly for Oreo, which has seen increased penetration but decreased purchase frequency [17][19] - The company is implementing price pack architecture in Europe to protect specific price points and stimulate consumption through promotional activities [12][27] Market Data and Key Metrics Changes - In emerging markets, the company sees significant growth potential, particularly in India and China, despite current consumer caution [36][40] - Brazil is performing well with good single-digit growth, while Mexico is experiencing a slowdown in consumer offtake [40][41] - Cocoa supply is expected to increase, leading to a potential surplus and a decrease in cocoa prices, which could positively impact margins [32][33] Company Strategy and Development Direction - The long-term strategy established in 2018 remains valid, focusing on building presence in key categories and supporting brand growth [5][6] - The company is exploring collaborations with other brands to drive innovation and market presence, viewing these partnerships as win-win opportunities [20][25] - The cakes and pastries category is identified as a significant growth opportunity, with expectations of reaching $125 billion by 2030 [52][54] Management's Comments on Operating Environment and Future Outlook - Management expressed that consumer spending behavior has not changed significantly over the past two and a half years, with consumers remaining cautious and prioritizing basic necessities [14][15] - The company anticipates continued challenges in North America over the next 6 to 12 months, with a focus on adapting to consumer behavior [19][40] - Management is optimistic about the upcoming Christmas season, expecting stronger engagement and better elasticities as consumers adjust to new price levels [12][29] Other Important Information - The company is closely monitoring cocoa supply dynamics and exploring alternative sourcing to mitigate cocoa price risks [30][34] - The capital allocation strategy remains disciplined, with a focus on smaller M&A opportunities and a pragmatic approach to share buybacks [47][50] Q&A Session Summary Question: What is the outlook for North America in the next 6 to 12 months? - Management indicated that consumers are cautious and spending has not increased, leading to a challenging environment for the foreseeable future [16][19] Question: How does the company view collaborations with other brands? - Collaborations are seen as opportunities for innovation and market expansion, with potential benefits for both parties involved [20][25] Question: What is the company's strategy regarding cocoa supply and pricing? - The company is optimistic about an increase in cocoa supply leading to lower prices, which would positively impact margins [32][33] Question: What are the growth expectations in emerging markets? - Emerging markets are expected to contribute significantly to growth, with a focus on building strong brands and distribution networks [36][39]

Financial Data and Key Metrics Changes - The company reaffirmed its full year 2025 organic sales growth guidance of about 5% despite facing headwinds from U.S. retailer restocking and adverse weather conditions in Europe [9][10] - For 2025, the company anticipates a reasonable top-line growth of 4% to 5% but expects a 10% decline in EPS, indicating a challenging profit environment [6][7] Business Line Data and Key Metrics Changes - Organic sales in North America declined approximately 3.5% year over year in the first half, attributed to retailer restocking and softer underlying trends [14][20] - The company is focusing on optimizing shopping trips and maximizing brand presence, particularly for products like Oreo, which has seen increased penetration but decreased purchase frequency [18][20] Market Data and Key Metrics Changes - In Europe, the company experienced a decline in chocolate volumes due to higher temperatures impacting consumption, particularly in key markets like the U.K. and Germany [12][27] - Elasticities in Europe have increased to around 0.6 to 0.7, higher than the anticipated 0.4, indicating a shift in consumer response to pricing [28][29] Company Strategy and Development Direction - The long-term strategy established in 2018 remains valid, focusing on building presence in key categories and supporting brand growth [5][6] - The company is exploring collaborations with other brands, such as Coca-Cola and Biscoff, to enhance product offerings and market presence without engaging in M&A [21][26] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending behavior has not changed significantly over the past two and a half years, with consumers remaining cautious and prioritizing basic necessities [15][16] - The outlook for North America is expected to remain challenging for the next 6 to 12 months, with a focus on adapting to consumer behavior and optimizing product offerings [20][40] Other Important Information - The company is optimistic about cocoa prices decreasing in the future due to increased supply from West Africa and other regions, which could improve margins [30][31][34] - The cakes and pastries category is seen as a significant growth opportunity, with expectations of reaching a $125 billion market by 2030 [52][54] Q&A Session Summary Question: What is the outlook for North America in the next 6 to 12 months? - Management expects continued challenges in North America, with consumers remaining cautious and spending patterns not changing significantly [20] Question: How does the company view its collaborations with other brands? - Collaborations are seen as win-win opportunities that enhance product offerings without the complexities of M&A [21][26] Question: What is the current view on cocoa fundamentals? - Cocoa supply is expected to increase, leading to a potential decrease in cocoa prices, which would benefit the company's margins [30][31][34] Question: What are the growth expectations in emerging markets? - Emerging markets are crucial for long-term growth, with a focus on building strong brands and expanding distribution [36][39]

Financial Data and Key Metrics Changes - The company reaffirmed its full year 2025 organic sales growth guidance of about 5% despite facing headwinds from U.S. retailer restocking and adverse weather conditions in Europe affecting chocolate demand [9][10] - For 2025, the company anticipates a reasonable top-line growth of 4% to 5% but expects a 10% decline in EPS, which is considered acceptable given the current cocoa circumstances [6][7] Business Line Data and Key Metrics Changes - Organic sales in North America declined approximately 3.5% year over year in the first half, attributed to retailer restocking and softer underlying trends [14][20] - The company is focusing on optimizing shopping trips and maximizing brand presence, particularly for Oreo, which has seen increased penetration but decreased purchase frequency [18][20] Market Data and Key Metrics Changes - In Europe, the company experienced higher elasticities than anticipated, with current levels around 0.6 to 0.7, compared to the expected 0.4 [28][29] - The cocoa supply situation is improving, with a 7% increase in cocoa pot counts in West Africa compared to the last five-year norm, suggesting potential price reductions in the future [31][32] Company Strategy and Development Direction - The long-term strategy established in 2018 remains valid, focusing on building presence in key categories and supporting brand growth [5][6] - The company is exploring collaborations with other brands, such as Coca-Cola and Biscoff, to enhance product offerings and market presence [21][26] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending has remained stagnant over the past 24 to 30 months, leading to cautious shopping behavior [15][16] - The outlook for North America is expected to remain challenging for the next 6 to 12 months, with consumers becoming increasingly careful in their spending [20] Other Important Information - The cakes and pastries category is projected to grow from $95 billion to approximately $125 billion by 2030, with the company aiming to enhance its position in this fragmented market [52][54] - The company is maintaining a disciplined approach to M&A, focusing on smaller assets that align with its strategic goals [48][50] Q&A Session Summary Question: What is the outlook for North America in the next 6 to 12 months? - Management expects continued challenges in North America, with consumers remaining cautious and spending levels stagnant [20] Question: How does the company view current cocoa levels and supply dynamics? - The company believes current cocoa prices are unsustainable and anticipates a surplus in the market, leading to potential price reductions [30][32] Question: What is the strategy regarding M&A and share buybacks? - The company remains disciplined in M&A, focusing on smaller strategic assets, while being pragmatic about share buybacks given current stock prices [46][50]

Core Insights - PepsiCo, Inc. (PEP) is experiencing strong momentum in its PepsiCo Beverages North America (PBNA) division, which has achieved high-single-digit growth in away-from-home channels and gained market share in no-sugar colas and Gatorade sports drinks [2][9] - The Frito-Lay North America (FLNA) division is facing challenges in stabilizing volumes across its core snack portfolio, particularly with the Lay's brand, while making progress in subcategories like Cheetos and Doritos [3][4][9] - The overall performance of PepsiCo in Q3 2025 will depend on whether the strong growth in PBNA can offset the ongoing headwinds faced by FLNA [4] PepsiCo Beverages North America (PBNA) - PBNA has delivered high-single-digit growth in away-from-home channels and gained market share in no-sugar colas and Gatorade [2][9] - The division's focus on innovation, affordability, and functional hydration products is driving consumer demand [2][9] - Management believes that PBNA will remain a key growth driver in the latter half of 2025 [2] Frito-Lay North America (FLNA) - FLNA is struggling with volume stabilization, particularly in the potato chip segment and Lay's brand, while making progress in other snack categories [3][4][9] - The division is addressing challenges through relaunches that emphasize natural ingredients and "real food" positioning [3] - Management is rightsizing its manufacturing footprint and pursuing productivity savings, but excess capacity and workforce adjustments may impact near-term performance [3] Competitive Landscape - Compared to Coca-Cola (KO), which is heavily beverage-focused and has a more straightforward growth trajectory, PepsiCo faces challenges in its snacking business [5][6] - Mondelez International (MDLZ) benefits from strong pricing power in its snacking category, unlike PepsiCo's FLNA, which is currently under pressure [7] Stock Performance and Valuation - PepsiCo shares have gained 12.8% in the past three months, contrasting with a 0.5% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 17.89X, slightly below the industry average of 18.24X [10] - The Zacks Consensus Estimate for PepsiCo's 2025 earnings implies a year-over-year decline of 1.8%, while the 2026 estimate suggests a growth of 5.2% [11]

Core Insights - PepsiCo, Inc. is addressing volume softness through strategic pricing, targeted value investments, and product innovation, particularly in its Frito-Lay North America segment [1][3] - The company has implemented a "dual-size" price-pack architecture to cater to both value-conscious and premium consumers, resulting in improved unit volumes [1][3] - PepsiCo is focusing on intelligent reinvestment strategies that balance affordability with profitability, utilizing data to optimize promotions and product sizes [2][3] Strategic Initiatives - The introduction of smaller packs and value-priced options aims to maintain consumer frequency while enhancing operational efficiencies [2][8] - PepsiCo's portfolio transformation includes expansion into high-growth international markets, with expected mid- to high-single-digit growth from countries like India and Brazil [3][8] - The company is leveraging international momentum to offset domestic volume pressures and preserve margins [3][8] Competitive Landscape - Coca-Cola and Mondelez are key competitors in the beverage and snack sectors, respectively, with Coca-Cola focusing on beverage dominance and Mondelez competing in the snack category [4][5][6] - Both competitors are also emphasizing innovation, affordability, and international expansion to capture market share [6] Financial Performance - PepsiCo's shares have declined by 11.6% year to date, contrasting with the industry's growth of 7% [7][8] - The company trades at a forward price-to-earnings ratio of 17.09X, which is below the industry's average of 18.47X [9] - Earnings estimates indicate a year-over-year decline of 3.6% for 2025, followed by a projected increase of 5.3% in 2026, with recent estimates remaining unchanged [10]

Core Insights - Mondelez International (MDLZ) is facing significant challenges due to record cocoa inflation, impacting gross profit despite a 3.1% increase in organic revenues in Q1 2025 driven by strong pricing in its chocolate portfolio [1][8] - The company has implemented a multipronged mitigation strategy focusing on pricing, revenue growth management, and strategic pack architecture, which has shown minimal disruption and maintained consumer loyalty to core brands [2][5] - There are concerns regarding Mondelez's ability to sustain profitability amid prolonged commodity inflation, with a 3.5% decline in volume mix attributed to pricing elasticity and planned pack downsizing [3][4] Financial Performance - In Q1 2025, Mondelez reported a 3.1% organic revenue growth, primarily from pricing gains in its chocolate segment, but experienced a decline in gross profit and adjusted earnings per share due to soaring cocoa prices [1][8] - Operating income in developed markets, particularly North America, was negatively affected by cocoa cost pressures and soft consumer demand, while Europe saw pricing success but still faced operating income erosion [3][4] Future Outlook - Mondelez is positioned to manage cocoa volatility effectively, with strong pricing strategies, cost controls, and resilient brands supporting its margin strategy [5] - The company anticipates benefiting from improved leverage as cocoa markets stabilize, allowing for reinvestment in long-term growth [5] Stock Performance - Mondelez shares have increased by 13.4% over the past six months, outperforming the industry and broader Consumer Staples sector [6] - The stock is currently trading at a forward P/E ratio of 20.95, above the industry average of 15.72, indicating market expectations of business stability [13] Earnings Estimates - The Zacks Consensus Estimate for Mondelez's earnings has been revised upward, with current fiscal year estimates at $3.02 per share and next fiscal year at $3.33 per share, reflecting positive sentiment [16]

Core Strategies - Mondelez International is focused on creating memorable consumer experiences through smart brand investments and innovation driven by customer preferences [1][3] - The company is well-positioned for steady growth and long-term value for shareholders by continuously evolving its product lineup to match changing tastes [1] Financial Performance - In the first quarter of fiscal 2025, Mondelez reported a 3.1% increase in organic net revenues, with a 6.6 percentage point gain attributed to favorable pricing strategies [3] - The chocolate category experienced a 10.1% increase in revenue, driven by strong performance in both developed and emerging markets [4] Product Portfolio and Innovation - Mondelez's biscuits and baked snacks portfolio also saw growth, supported by brands like LU and 7DAYS, with revenue growth management strategies playing a key role [5] - Innovation is a cornerstone of Mondelez's strategy, exemplified by the successful launch of the Cadbury Dairy Milk Biscoff bar, which became the best-selling SKU in the UK [7] Market Expansion - The company expanded its distribution network into over 100,000 stores in emerging markets during the first quarter of fiscal 2025, enhancing market penetration [8] Competitive Positioning - Mondelez is effectively positioning itself for sustainable success by focusing on core snacking categories, investing in consumer-centric product development, and emphasizing health-conscious offerings [9] - The stock has gained 1.4% over the past three months, outperforming the industry's 3.7% decline [9]

Q1 2025 Financial Performance - Organic Net Revenue grew by 3.1%, driven by a 6.6 percentage points increase from pricing, but offset by a 3.5 percentage points decrease in volume/mix[12] - Adjusted Gross Profit decreased by 12.0%[12] - Adjusted EPS decreased by 18.3%[12] - Free Cash Flow was $0.8 billion[12] Regional Performance - Emerging Markets Organic Net Revenue grew by 3.9%[33] - Developed Markets Organic Net Revenue grew by 2.6%[33] - Europe's adjusted operating income decreased by 25.6%[42] - North America's adjusted operating income decreased by 18.0%[42] Category Performance - Chocolate Organic Net Revenue grew by 10.1%[34] - Biscuits & Baked Snacks Organic Net Revenue grew by 0.3%[34] - Gum & Candy Organic Net Revenue grew by 1.0%[34] 2025 Outlook - The company reaffirmed its 2025 outlook, expecting approximately 5% Organic Net Revenue growth and over $3 billion in Free Cash Flow[60] - Adjusted EPS growth is expected to be around -10% on a constant currency basis[60] - The company anticipates share repurchases of over $3 billion[60]