Analysts expect Mondelēz International (MDLZ) to post sales of $6.0 billion in 2Q17, a fall of ~4.4% YoY (year-over-year). Notably, the company’s sales continue to fall on account of weak volumes amid lower demand.
Mondelēz has reported 14 consecutive quarters of falling sales. In comparison, The Hershey Company’s (HSY) top line rose 1.5% in 2Q17 thanks to its better performance in the North American market.
Factors affecting Mondelēz’s 2Q17 sales
Alongside the slowdown in demand and macroeconomic challenges in international markets, Mondelēz’s 2Q17 sales are projected to take a hit from the recent global cyberattack. Management stated that 2Q17 sales growth is likely to be negatively impacted by 300 basis points due to the disruption.
Mondelēz International’s shipping and invoicing process was affected in the last four days of 2Q17. The company’s management also noted that it had permanently lost sales in some markets on account of holiday feature timing. However, the company’s 3Q17 is expected to benefit from delayed shipments.
Packaged food manufacturing companies such as Mondelēz, Hershey, The Kraft Heinz Company (KHC), The Kellogg Company (K), General Mills (GIS), and The Campbell Soup Company (CPB) are seeing a slowdown in demand and are struggling to drive sales. However, in the food segment, the confection category is still witnessing growth, though it’s happening at a slower rate, which should help Mondelēz and Hershey.
As for Mondelēz, the company’s power brands are witnessing healthy growth. Also, wellness products such as GOOD THiNS, Véa, and belVita are adapting well to the changing consumer demand for food. All these measures should help to drive incremental sales for the company.
Mondelēz’s planned innovative pipeline for 2H17 and its focus on the expansion of its distribution network will further supplement sales growth. However, in 2Q17, Mondelēz’s sales will remain low owing to the adverse impact of the cyberattack and a slowdown in demand.