Latest news with #globalSupplyChain
Yahoo
a day ago
- Business
- Yahoo
Gross Profit Under Pressure: Can Mondelez Withstand Cocoa Surge?
Mondelez International MDLZ entered 2025 facing one of the most formidable headwinds in its global supply chain: record cocoa inflation. While first-quarter 2025 organic revenues rose 3.1%, driven largely by strong pricing in its chocolate portfolio, the gains were not enough to shield gross profit from compression. The company's gross profit declined significantly as cocoa prices soared to unprecedented highs, adding pressure on margins even amid robust retail emphasized a multipronged mitigation strategy built around pricing, revenue growth management and strategic pack architecture. Mondelez successfully implemented pricing across key markets with minimal disruption, indicating strong retailer alignment. Elasticity impacts, while present, were in line with expectations and suggest consumer loyalty to core brands like Oreo and Cadbury remains intact, especially where entry-level price points were the first quarter numbers raise key questions about Mondelez's ability to sustain profitability under prolonged commodity inflation. Volume mix declined 3.5% due to elasticity from chocolate pricing and planned pack downsizing. Notably, operating income in developed markets, particularly North America, was hurt by both cocoa cost pressure and soft consumer demand. In Europe, pricing landed well, but operating income erosion still occurred despite strong share noted that while some commodity inputs were procured favorably, the benefit was not enough to offset the cocoa's impact. Even with strong cost controls and productivity gains, adjusted earnings per share dropped by double digits, underscoring the bottom-line ahead, Mondelez is well-positioned to manage cocoa volatility. Strong pricing, effective cost controls and resilient brands support its margin strategy. As cocoa markets begin stabilizing, the company stands to benefit from improved leverage while reinvesting in long-term growth. Its disciplined execution underscores confidence in navigating near-term pressures and sustaining momentum in its core chocolate business. Shares of this Zacks Rank #2 (Buy) company have rallied 13.4% in the past six months against the industry's 4% decline. MDLZ outperformed the broader Consumer Staples sector and the S&P 500 index's growth of 5.9% and 1.1%, respectively, during the same period. Image Source: Zacks Investment Research Closing yesterday's trading session at $66.35, the MDLZ stock is trading 12.8% below its 52-week high of $76.06 attained on Sept. 10, 2024. Technical indicators show the company's strong performance. The stock is trading above its 200-day SMA (simple moving average) of $65.18, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors' confidence in MDLZ's financial health and growth prospects. Image Source: Zacks Investment Research Mondelez currently trades at a forward 12-month P/E ratio of 20.95 compared with the industry average of 15.72 and the sector average of 17.49. This valuation places the stock at a premium relative to peers, reflecting broader market expectations around its business stability and ability to navigate current cost and demand dynamics. Image Source: Zacks Investment Research The positive sentiment surrounding MDLZ is reflected in the upward revisions in the Zacks Consensus Estimate for earnings. In the past 30 days, the consensus estimate has moved up by a cent to $3.02 per share for the current fiscal year and to $3.33 for the next fiscal year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)The Zacks Consensus Estimate for the current and next fiscal year's sales is pegged at $38.4 billion and $40.1 billion, implying year-over-year growth of 5.3% and 4.5%, respectively. Image Source: Zacks Investment Research Nomad Foods NOMD, which manufactures frozen foods, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods' current financial-year sales and earnings implies growth of 4.6% and 7.3%, respectively, from the year-ago Group AB OTLY, an oatmilk company, provides a range of plant-based dairy products made from oats. It presently has a Zacks Rank of 2. OTLY delivered a trailing four-quarter earnings surprise of 25.1%, on consensus estimate for Oatly Group's current fiscal-year sales and earnings implies growth of 2.3% and 63.8%, respectively, from the year-ago S.A. BRFS raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank #2. BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on Zacks Consensus Estimate for BRF's current fiscal-year earnings implies growth of 11.1% from the prior-year levels. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BRF S.A. (BRFS) : Free Stock Analysis Report Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report Nomad Foods Limited (NOMD) : Free Stock Analysis Report Oatly Group AB Sponsored ADR (OTLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The National
2 days ago
- Politics
- The National
IMO urges ships to check Strait of Hormuz security measures
The International Maritime Organisation has said there were no indications of any increased threat to shipping in the Arabian Gulf, despite Iranian calls for international measures to prevent escalation in the Strait of Hormuz. Fears over a move to close the waterway after Israel's targeting of Iran's nuclear infrastructure are rising. Closure of the strait would disrupt global supply chains, as a fifth of global oil shipments pass through the channel that connects the Gulf to the Arabian Sea. Speaking at the IMO's annual safety meeting on Wednesday, secretary Arsenio Dominguez said no signs of closure or disruption had appeared yet. 'We're not at that stage,' he said, answering a question from The National. Mr Dominguez urged shipping companies to carry out security assessments before attempting to cross the strait. 'You need to carry out the security assessment and then make the decision whether it is appropriate and it is safe for the vessel to transit,' he said. Seyed Ali Mousavi, Iranian representative to the IMO – and also ambassador to the UK – warned in the morning session that increasing danger for ships was becoming apparent, after accusing Israel of attacking an oil refinery and gas field on the coast of Asalouyeh. 'These actions directly endanger international maritime security and the global energy supply chain,' he said. "If the international community fails to take urgent and concrete measures to halt this unlawful aggression, the risk of escalation at sea becomes imminent." The IMO's position is there no sign of a crisis point as yet. 'There's no indication that ships [or] seafarers are being targeted or any expected disruption right now in the region when it comes to maritime trade,' Mr Dominguez said. Mr Mousavi said the IMO was 'mandated to protect' Iran from attacks on its port and maritime infrastructure and criticised Israel for attacks on Iranian oil tankers and ports he said had been taking place since 2019. 'These hybrid threats – combining physical and cyber aggression – represent a multifaceted assault on maritime safety, port security and the freedom of navigation, which this organisation is mandated to protect,' he said. Iranian state TV told the world to brace itself for a major attack, reporting on Wednesday that "tonight, a great surprise will occur – one that the world will remember for centuries". Israel and India also made statements about the war in their addresses to the convention. Mr Dominguez said addressing the conflict was not within the agency's remit, but that it was equipped to act in the event of a 'negative impact' on shipping, as it did during the Red Sea crisis, when the Iran-backed Yemeni militia the Houthis targeted commercial ships crossing the Red Sea and the Gulf of Aden in response to Israel's war in Gaza, notably when it negotiated the release of the crew of the stricken MV Galaxy Leader last year. 'There's no room for IMO or specific role for IMO to come in at this stage. If things evolve, I will be the first one to start speaking to the countries,' he said. 'I demonstrated clearly, when the ships were targeted in the Red Sea, that's when I spent considerable amount of time in actually talking to the countries, bringing the parties together to address the negative impact that this situation was having on shipping, seafarers, the environment, ships and the economy." Oman – a member state of the agency - served as an intermediary for the Houthis. 'Oman was a country that helped me greatly,' Mr Dominguez said. The Houthis entered a ceasefire agreement with the US in May after an aggressive military campaign. The latest statements Mr Dominguez received from the group since the dea, which they also sent to UN Secretary General Antonio Guterres, featured 'no indication of targeting ships'. Mr Dominguez addressed the dis r uption to commercial cargoes in the Red Sea. 'The way that trade starts to flow back into the Red Sea is not something that will happen overnight,' he said. 'But we have seen an increase already on trade going through the Red Sea and the Suez.'
Reuters
10-06-2025
- Business
- Reuters
US, China set for second day of trade talks in London
Top U.S. and Chinese officials will resume trade talks for a second day in London on Tuesday, hoping to secure a breakthrough over export controls for goods such as rare earths that have threatened a global supply chain shock and slower economic growth. Julian Satterthwaite reports.
RNZ News
10-06-2025
- Business
- RNZ News
US-China trade talks to resume for a second day
By Kate Holton and Alistair Smout , Reuters Photo: AFP Top US and Chinese officials will resume trade talks for a second day in London on Tuesday, hoping to secure a breakthrough over export controls for goods such as rare earths that have threatened a global supply chain shock and slower economic growth. Investors are hoping that the two superpowers can improve ties after the relief sparked by a preliminary trade deal agreed in Geneva last month gave way to fresh doubts after Washington accused Beijing of blocking exports that are critical to sectors including autos, aerospace, semiconductors and defence. The talks come at a crucial time for both economies, with customs data showing that China's exports to the US plunged 34.5 percent in May, the sharpest drop since February 2020, when the outbreak of the Covid-19 pandemic upended global trade. While the impact on US inflation and the jobs market has so far been muted, the dollar remains under pressure from US policymaking. The two sides met at the ornate Lancaster House in the British capital on Monday to discuss disagreements around the Geneva deal, and are due to resume talks early on Tuesday before both sides are expected to issue updates. The US side is led by US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, while the Chinese contingent is helmed by Vice Premier He Lifeng. The inclusion of Lutnick, whose agency oversees export controls for the US, is one indication of how central rare earths have become. China holds a near-monopoly on rare earth magnets, a crucial component in electric vehicle motors. Lutnick did not attend the Geneva talks at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other. Trump's often erratic policymaking on tariffs has roiled global markets, sparked congestion and confusion in major ports, and cost companies tens of billions of dollars in lost sales and higher costs. The second round of meetings between the two sides comes four days after Trump and Xi spoke by phone, their first direct interaction since Trump's 20 January inauguration. Following the call Trump said Xi had agreed to resume shipments to the US of rare earths minerals and magnets, and Reuters reported that China has granted temporary export licenses to rare-earth suppliers of the top three US automakers. But tensions remain high over the export controls, after factories around the world started to fret that they would not have enough of the materials they need to keep operating. - Reuters
Reuters
10-06-2025
- Business
- Reuters
US-China trade talks to resume for a second day
LONDON, June 10 (Reuters) - Top U.S. and Chinese officials will resume trade talks for a second day in London on Tuesday, hoping to secure a breakthrough over export controls for goods such as rare earths that have threatened a global supply chain shock and slower economic growth. Investors are hoping that the two superpowers can improve ties after the relief sparked by a preliminary trade deal agreed in Geneva last month gave way to fresh doubts after Washington accused Beijing of blocking exports that are critical to sectors including autos, aerospace, semiconductors and defence. The talks come at a crucial time for both economies, with customs data showing that China's exports to the U.S. plunged 34.5% in May, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. While the impact on U.S. inflation and the jobs market has so far been muted, the dollar remains under pressure from U.S. policymaking. The two sides met at the ornate Lancaster House in the British capital on Monday to discuss disagreements around the Geneva deal, and are due to resume talks early on Tuesday before both sides are expected to issue updates. The U.S. side is led by U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer, while the Chinese contingent is helmed by Vice Premier He Lifeng. The inclusion of Lutnick, whose agency oversees export controls for the U.S., is one indication of how central rare earths have become. China holds a near-monopoly on rare earth magnets, a crucial component in electric vehicle motors. Lutnick did not attend the Geneva talks at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other. Trump's often erratic policymaking on tariffs has roiled global markets, sparked congestion and confusion in major ports, and cost companies tens of billions of dollars in lost sales and higher costs. The second round of meetings between the two sides comes four days after Trump and Xi spoke by phone, their first direct interaction since Trump's January 20 inauguration. Following the call Trump said Xi had agreed to resume shipments to the U.S. of rare earths minerals and magnets, and Reuters reported that China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers. But tensions remain high over the export controls, after factories around the world started to fret that they would not have enough of the materials they need to keep operating.
