US chocolate giant Mondelez International has told analysts that President Trump’s threat to impose import tariffs on Mexican and Canadian goods could create another “headwind” for the business.
Speaking after releasing its 2024 results yesterday (4 February) the Cadbury and Oreo brands owner’s CFO Luca Zaramella talked about what he described as “the impact of the potentially significant new executive orders imposing 25% tariffs on US imports from Mexico and Canada”.
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He said: “This would create an additional headwind to the business, but given the fluid and rapidly changing nature of timing, it is difficult to provide a reliable estimate of impact for the full-year at this time.”
President Trump has delayed introducing 25% import tariffs on goods imported from its northern and southern neighbours for a month after talks with Mexico and Canada’s leaders and their commitment to beefing up security at their borders with the US, but uncertainty remains.
Mondelez CEO Dirk Van de Put said consumer confidence in the US has “improved slightly” following the US election, “despite continuing concern about the economic outlook” but he said later in the call that “the consumer in [the] US is still quite concerned [by] the economy, the political situation and, of course, inflation.”
The Chicago-based business is also having to deal with cost inflation in its supply chain in respect to “unprecedented” cocoa prices.
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By GlobalDataZaramella said: “The market continues to show signs of volatility and has reverted to elevated levels during much of the past three months. Despite a good main crop, several factors have contributed to this situation, including concerns about the mid-crop in the Ivory Coast, ongoing low liquidity and low industry coverage. This backdrop has created more pressure on our P&L for ’25 as it relates to the portion that was still unhedged or protected through flexible structures at the time we spoke to you back in the Q3 call.
“Although we cannot predict specific timing, we continue to believe that the inverted nature of the market, combined with lower demand levels due to higher pricing and elasticity, will eventually bring cocoa to a more sustainable price level.”
Van de Put told analysts: “We are confident that our chocolate playbook will enable us to successfully navigate unprecedented cocoa cost inflation.”
Mondelez said it has continued to implement pricing actions to counteract supply chain inflation.
Van de Put said: “We have to do significant line pricing, which we are implementing as we speak. If cocoa prices remain elevated where they are today, that might require more pricing in the second half of this year and in ’26. But as I said, we think eventually, cocoa prices will start to come down.
“There already has been some significant pricing around the world in chocolate and I’m happy to report that the elasticities have held up well.”
Mondelez, linked with a takeover of US peer Hershey at the end of last year, reported Q4 net revenues of $9.60bn, up 3.1% year-on-year. Operating income was up by $418m but adjusted operating income dropped by $396, attributable to higher input cost inflation.
For the full-year, net revenues of $36.44bn were up by 1.2% over the prior year while operating income was up by $843m and adjusted operating income up by $456m.
Mondelez is expecting organic net revenue growth to be roughly 5% for 2025.
Commenting on future unpredictability, Robert Moskow, an analyst with TD Cowen, said: “Management described the outlook for 2026 as highly bifurcated with outsized EPS growth if cocoa futures normalise lower from their record highs and modest growth EPS if futures remain elevated.
“We agree that predicting the outcome for 2026 with any certainty is impossible, but this characterisation only makes it harder for a CPG investor who pays a premium for predictability to own the stock.”
