Mondelez International, Inc. - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Mondelez International, Inc. is a global manufacturer and marketer of snack foods, including chocolate, biscuits, baked snacks, gum & candy, meals, and beverages. The company operates through four geographic segments: Latin America, AMEA (Africa, Middle East, and Asia), Europe, and North America.
Key Financial Metrics
| Metric (in millions, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Revenues | $10,080 | $9,313 |
| Operating Income | $808 | $680 |
| Net Earnings (Attributable to Mondelez) | $560 | $402 |
| Diluted EPS | $0.44 | $0.31 |
| Operating Margin | 8.0% | 7.3% |
| Net Cash from Operating Activities | $467 | $1,092 |
| Total Debt | $21,024 | $21,205 |
| Cash and Cash Equivalents | $1,524 | $2,125 |
Material Changes vs. Prior Period
- Revenue Growth: Net revenues increased 8.2% year-over-year, driven by higher net pricing and favorable currency-related items. Organic Net Revenue (non-GAAP) grew 3.0%.
- Profitability: Operating income rose 18.8% to $808 million. This increase was primarily due to a favorable year-over-year change in mark-to-market impacts from commodity and foreign currency derivatives (a reduction in losses from $669 million in Q1 2025 to $273 million in Q1 2026).
- Adjusted Performance: Despite GAAP earnings growth, Adjusted Operating Income (non-GAAP) decreased 14.0% to $1,182 million, and Adjusted EPS decreased 9.5% to $0.67. This decline was driven by higher input costs (raw materials, packaging, energy), unfavorable volume/mix, and higher restructuring and ERP implementation costs.
- Cash Flow: Net cash provided by operating activities decreased significantly to $467 million from $1,092 million, attributed to lower cash-basis net earnings and unfavorable working capital movements.
- Debt: Total debt remained relatively stable at $21.0 billion. The company repaid $222 million in notes during the quarter and issued new Swiss franc-denominated notes totaling $1.074 billion in April 2026.
Guidance, Outlook, and Risks
- Outlook: Management anticipates ongoing volatility in the macroeconomic environment. While the outlook for revenue growth remains strong, the company expects elevated raw material costs (particularly cocoa, though lower than prior year peaks) and pricing elasticity impacts to continue affecting consumer demand.
- Capital Expenditures: Expected to be up to $1.4 billion for 2026, including funding for the multi-year ERP System Implementation program.
- Restructuring: The company initiated restructuring actions in Q4 2025 to reduce cost structure, incurring $48 million in charges in Q1 2026.
- Geopolitical Risks:
- Ukraine/Russia: Operations in Ukraine (0.4% of revenue) and Russia (3.1% of revenue) face risks of asset expropriation or curtailment. Production in Ukraine was halted in 2022; facilities are being restored.
- Middle East: Recent military strikes on Iran caused brief production stops in Bahrain and increased shipping costs. Impacted markets generated 1.0% of consolidated revenue.
- Trade Policy: The company is monitoring new U.S. tariffs and the potential impact of the Supreme Court ruling on IEEPA tariffs. Approximately $20 million in IEEPA tariffs were paid, with refund timing uncertain.
- Commodity Trends: Cocoa costs are expected to remain elevated compared to historical levels. The company relies on hedging and pricing actions to mitigate these costs.
Key Facts for Investor Verification
- Derivative Impact: Verify the sustainability of the GAAP earnings improvement, which was heavily influenced by a $396 million year-over-year reduction in mark-to-market derivative losses.
- Organic Growth vs. Pricing: Confirm the extent to which revenue growth is driven by pricing actions versus volume, given the reported unfavorable volume/mix in Europe, Latin America, and North America.
- ERP Implementation Costs: Monitor the $49 million in ERP System Implementation costs incurred in Q1 2026 and the total $1.2 billion program budget approved in 2024.
- Share Repurchases: Note that the company did not repurchase any shares under its $9.0 billion program in Q1 2026, leaving approximately $6.7 billion in remaining capacity.
- Geopolitical Exposure: Assess the potential financial impact of continued instability in Russia, Ukraine, and the Middle East on the 4.5% of revenue generated in these regions.