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Mondelez International’s Bottom Line Rose in 1Q16

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Price movement of Mondelez International

Mondelez International (MDLZ) has a market cap of $67.9 billion. MDLZ rose 3.3% to close at $43.88 per share on April 27. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.6%, 9.4%, and -1.7%, respectively. This means MDLZ is trading 4.4% above its 20-day moving average, 6.5% above its 50-day moving average, and 3.1% above its 200-day moving average.

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Related ETFs and peers

The Fidelity MSCI Consumer Staples ETF (FSTA) invests 3.6% of its holdings in Mondelez International. The ETF tracks a market cap–weighted index of stocks in the US consumer staples sector. The YTD price movement of FSTA was 3.6% as of April 26. The SPDR S&P 500 ETF (SPY) invests 0.37% of its holdings in Mondelez. The ETF tracks a market cap–weighted index of US large- and mid-cap stocks selected by the S&P Committee. The market caps of Mondelez’s competitors are as follows.

  • Kellogg Company (K)—$26.8 billion
  • General Mills (GIS)—$36.4 billion
  • Hershey (HSY)—$13.9 billion

Performance of Mondelez International in fiscal 1Q16

Mondelez International reported fiscal 1Q16 net revenues of $6,455.0 million, a fall of 16.8% compared to net revenues of $7,762.0 million in fiscal 1Q15. Revenue from Latin America, Asia Pacific, Eastern Europe, the Middle East & Africa, Europe, and North America fell 35.0%, 2.3%, 21.3%, 23.1%, and 0.4%, respectively, in fiscal 1Q16 compared to fiscal 1Q15. The company’s gross profit margin rose 3.7%, and its operating income fell 11.0% in fiscal 1Q16 compared to the prior year. Its net income and EPS (earnings per share) rose to $554.0 million and $0.35, respectively, in fiscal 1Q16 compared to $324.0 million and $0.19, respectively, in fiscal 1Q15.

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Mondelez’s cash and cash equivalents fell 28.4%, and its inventories rose 5.6% in fiscal 1Q16 compared to fiscal 4Q15. Its current ratio fell to 0.68x and debt-to-equity ratio rose to 1.3x in fiscal 1Q16 compared to 0.82x and 1.2x, respectively, in fiscal 4Q15. The company has repurchased ~$1.2 billion of its common stock at an average price of $41.04 per share. Mark Clouse, the CCO, is leaving Mondelez to become the CEO of a North American publicly traded food company starting in late May.

Projection

The company has affirmed the following projections for fiscal 2016.

  • organic net revenue growth of at least 2%
  • adjusted operating income margin in the range of 15% to 16%
  • adjusted EPS growth in double digits on a constant-currency basis
  • free cash flow excluding items of at least $1.4 billion

In the next and final part of this series, we’ll look at Michael Kors Holdings.

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