US: Mondelez Tops Estimates, But Hershey Disappoints In Q1

Mondelez International and Hershey Co have reported contrasting results for their respective fiscal first quarters. Mondelez also announced the exit of a senior executive, while Hershey unveiled a new acquisition.

For the three months to 31 March, Mondelez saw its net profit surge up 71% to $554m, helped by price hikes and increased volumes. However, revenue was down 16.8% to $6.46bn, the tenth straight quarter of declines, hurt by the strength of the US dollar and a consumer shift towards healthier products. Like-for-like sales were up 2.1%.

The group said volumes were up in key markets such as North America and Asia Pacific, despite price hikes. It also grew volumes in Europe, although it lowered prices there. It noted that demand for items such as cookies in the US had slowed, while it was also affected by difficult conditions in China and Brazil.

The company reiterated its full-year forecast, but said the impact of the dollar will reduce net revenue growth by about 3 percentage points from its previous estimate of about 6 points.

Mondelez also said that Chief Commercial Officer Mark Clouse is leaving the company, following 20 years of service, to take over as CEO of Pinnacle Foods. It said it will not replace him.

In contrast, Hershey saw its net profit drop by 6.1% to $229.8m, while sales were down 5.6% to $1.83bn. This is the third straight quarter that sales at the group have dropped, and it attributed the same to weaker demand in North America. Sales in that market fell by 4.3% in the three months to 3 April, the first such decline in five quarters.

Hershey also said it has acquired Ripple Brand Collective, the maker of barkTHINS chocolates. No financial details of the deal were disclosed. barkTHINS, which is expected to generate sales of around $75m in 2016, produces non-GMO products with no artificial flavours or preservatives.