Mondelez Q1 Preview: Earnings Decline Seen Amid Persistent Cost and Volume Headwinds

What happened

Mondelez is set to report Q1 2026 earnings on April 28 with consensus expecting revenues of $9.77 billion (up slightly) but adjusted EPS of $0.61, down year-over-year, reflecting the continued impact of elevated cocoa and input costs. The earnings preview comes against the backdrop of a challenging year in which the company has already cut its 2025 outlook twice, with adjusted gross margin contracting 760 basis points through the first nine months of 2025. Beyond cocoa, the company faces broad input inflation, tariffs, and consumer down-trading in North America and Europe, leading to negative volume/mix globally. Management’s 2026 guidance, expected alongside Q1 results, will be critical to assess whether cocoa cost relief and volume stabilization can deliver the high-single-digit EPS growth the stock prices in. At ≈$53.60, MDLZ trades at roughly 19.8x depressed 2025 EPS, offering limited margin of safety until there is clearer evidence of margin repair and volume recovery.

Implication

The investment case hinges on a multi-year recovery in margins and volumes, which is far from assured. The current valuation (≈20x trough earnings) assumes a rapid rebound; if the recovery disappoints, the stock could re-rate lower. Attractive entry points may emerge after Q1 if guidance underwhelms and the stock pulls back toward our $47 attractive entry level.

Thesis delta

The initial thesis that cocoa costs would be a temporary shock has been invalidated; earnings pressure is broader and more persistent than a single commodity spike. The new evidence from filings and regional trends shows volume erosion, elevated elasticity, and tariff risks that may delay margin recovery. Our rating remains WAIT, and we need to see concrete proof of margin and volume improvement before turning bullish.