MDLZ · Q1 2026 Earnings

Cautious

Mondelez International

Reported April 28, 2026

30-second summary

Mondelez printed Q1 organic revenue growth of 3.0% (pricing +3.5pp, vol/mix -0.5pp) — 100-300bps ahead of the FY2026 flat-to-2% guide — yet adjusted EPS fell 14.9% cc YoY to $0.63 and management reaffirmed every full-year line (organic flat-to-2%, adjusted EPS growth flat-to-5% cc, FCF ~$3B). Management is absorbing a newly disclosed Middle East cost headwind and reinvesting the topline beat rather than raising the bar, which keeps the 2027 inflection narrative intact but means the FY2026 EPS algorithm now relies on H2 holding. Adjusted gross margin compressed 270bps YoY to 30.7% driven primarily by input cost inflation and unfavorable volume/mix — management's commentary on cocoa fundamentals at $2,500/tonne separately suggests easing ahead, but the Q1 GM line does not yet show it. Adjusted operating margin landed at 11.7%, down 310bps YoY, and the $350M Q1 inventory drag landed roughly as flagged.

Headline numbers

EPS

Q1 FY2026

$0.67

Revenue

Q1 FY2026

$10.08B

+8.2% YoY

Gross margin

Q1 FY2026

27.8%

Free cash flow

Q1 FY2026

$0.15B

Operating margin

Q1 FY2026

8.0%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$10.08B	+8.2%	$10.50B	-4.0%
EPS	$0.67	—	$0.72	-6.9%
Gross margin	27.8%	—	28.2%	-40bps
Operating margin	8.0%	—	9.1%	-110bps
Free cash flow	$0.15B	—	—	—

Guidance

Company reaffirms all FY2026 full-year guidance (Organic Revenue growth flat-2%, Adjusted EPS growth flat-5% constant currency, FCF ~$3B) while Q1 beat organic revenue expectations at 3.0% YoY growth.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Organic Net Revenue growth	Q1 FY2026	flat to 2%	3.0%	+1.0-3.0 pp above guide	Beat

Reaffirmed unchanged this quarter: Organic Net Revenue growth (flat to 2%), Adjusted EPS growth (flat to 5% on a constant currency basis), Free Cash Flow (approximately $3 billion), Currency translation impact on net revenue growth (approximately +2.0%), Currency impact on Adjusted EPS (+$0.06)

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Organic Net Revenue Growth	3.0%
Volume/Mix	-0.5 pp
Pricing Growth	3.5 pp
Return of Capital to Shareholders	$0.6 billion
2026 Free Cash Flow Outlook	~$3.0 billion

Profitability

Q1 FY2026

Segment	Q1 FY2026
Adjusted Gross Profit Margin	30.7%
Adjusted Operating Income Margin	11.7%
Adjusted EPS (constant currency)	$0.63

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Latin America	$1.348B	+12.1%
Asia, Middle East & Africa	$2.304B	+14.3%
Europe	$3.871B	+9.0%
North America	$2.557B	+0.5%
Emerging Markets	$4.149B	+11.4%
Developed Markets	$5.931B	+6.1%

Management tone

Q2 anchor: pricing tank running low → Q3: structural elasticity reset → Q4: cocoa-windfall reinvestment / 2027 inflection deferred → Q1: outperformance absorbed into reinvestment, 2027 commitment hardening.

The "reinvest don't raise" posture is now an explicit operating principle, not an in-quarter judgment call. Last quarter the CFO framed FY2026 as "establishing a new base" with 2027 as the inflection. This quarter the same construct is sharpened in Q&A as a commitment: ahead of expectations, Middle East crisis as a new cost headwind not in original forecast, reaffirming EPS guidance to absorb those costs, and — critically — "if EPS upside materializes, reinvesting back into business rather than raising guidance" alongside an explicit "commitment to strong 2027 EPS growth." Management has now told investors twice in a row that 2026 is the year they bank cost and supply-chain progress while reinforcing demand-side investment. That makes any FY2026 guide raise this year unlikely absent cocoa moving meaningfully below the $3,000/tonne anchor.

The European chocolate elasticity narrative has shifted from "concession of structural reset" to "competitive stability with industry coverage intact." On the Q3 call the CEO conceded European chocolate elasticity at 0.7-0.8 vs. modeled 0.4-0.5; on the Q4 call he conceded pricing corrections were coming in Northern Europe, Germany, Nordics, UK. This quarter Megan Clapp's Q&A surfaced a much calmer read: "competitive environment stable with most industry covered for year," European retailer negotiations "almost entirely complete and in line with planning," "share trends improving in chocolate," and "base business (excluding Easter) turned from share loss to slightly positive." Cocoa is characterized as fundamentally fair at $2,500/tonne with industry headed for another year of surplus. That is the elasticity-reset working as designed — pricing fell from +9.9pp to +3.5pp and volume/mix improved from -4.8pp to -0.5pp in a single quarter — but it depends on the Q2/Q3 European print confirming the trend rather than reversing it.

The Middle East crisis is a new, partially quantified cost headwind that did not exist in prior guides. The Q4 release framed FY2026 outlook in the context of "greater than usual volatility, including geopolitical, trade and regulatory uncertainty and commodity prices." This quarter the CFO in Q&A made the geopolitical category concrete: "Middle East crisis creating incremental costs for alternative production routes," with oil costs covered for the year but profitability impacted. Combined with the disclosed $350M Q1 inventory phasing headwind landing as expected and adjusted gross margin compressing 270bps YoY to 30.7%, the read is that supply-chain productivity is partially offsetting the Middle East drag and input cost inflation — but the cost line is no longer a free variable.

The U.S. consumer framing is locked in as a multi-year structural condition, not a cyclical pause. Q2 treated U.S. weakness as transient; Q3 reframed as structural envelope compression; Q4 confirmed FY2025 biscuits down 3% and rejected deep pricing cuts. This quarter Mosco's Q&A drew the same line forward into the rest of 2026: "U.S. consumer will remain subdued with financial concerns and basket volume flat for 3 years while prices up" — but the company is now claiming concrete share-gain mechanisms ("Walmart value channel and Costco grew biscuits >4% vs. 0.3% total market," Sour Patch Kids double-digit, Ritz innovation, ventures close to double-digit). Volume and revenue inflection is now explicitly targeted for H2. That is a falsifiable claim for the next two quarters.

Q&A highlights

Andrew Lazar · Barclays

Walk through key drivers and climate in emerging markets and where improvement is being seen in developed markets, particularly European chocolates and U.S. biscuits.

Developed markets performing well with stable but fragile consumer confidence in Europe. Easter drove strong results. U.S. consumer confidence remains low with purchasing power up but affordability concerns persist. Emerging markets grew 6.3% in Q1 with strong performance across India, Brazil, and China improving. Volume mix positive at 0.5% (nearly 1% excluding Argentina).

Emerging markets grew 6.3% in Q1Volume mix in emerging markets up 0.5% (nearly 1% excluding Argentina)China mid-single digit growthIndia strong double-digit growth in chocolate and biscuits

Peter Galbo · Bank of America

Why reaffirm EPS guidance despite strong Q1 start, and what are parameters around the strong 2027 earnings growth mentioned in slides?

Management ahead of expectations in Q1 but facing Middle East crisis headwinds not in original forecast, including extra costs for alternative production routes and oil price impacts. Reaffirming EPS guidance to absorb these costs. If EPS upside materializes, reinvesting back into business rather than raising guidance. European retailer negotiations nearly complete and in line with planning.

Ahead of expectations in Q1Middle East crisis creating incremental costs for alternative production routesOil costs covered for the year but impacting profitabilityEuropean retailer negotiations almost entirely complete

Megan Clapp · Morgan Stanley

Update on competitive environment in Europe given cocoa volatility and how that's shaping rest of year outlook.

Competitive environment stable with most industry covered for year. Customer negotiations went well. No price movements at moment as everyone awaits main cocoa crop data. Chocolate market doing well with improved share trends. Volume trends improving sequentially as elasticity impacts lap and plant outage anniversary passes. Management assessment: cocoa fundamentals unchanged, $2,500/ton fair representation of supply/demand, industry headed for another year of surplus.

Most of industry still covered for year on cocoaStrong Easter campaign including UKShare trends improving in chocolateBase business (excluding Easter) turned from share loss to slightly positive

David Palmer · Evercore ISI

European consumer and price elasticity trends given fragile consumer comments but organic sales down only 0.5%, and gross margin performance better than expected despite $350M inventory headwind.

No concerning shifts in consumer buying patterns so far though Middle East conflict poses fragility risk through energy prices affecting fertilizers, packaging, and inflation. Consumers vigilant but category performing well. Gross margin upside driven by slight positive volume mix (excluding downsizing), leverage from profitable businesses like China, and supply chain productivity improvements offsetting some Middle East cost headwinds.

Organic sales down 0.5% in Europe$350M inventory phasing headwind as expectedGross margins down 270 basis points (better than feared)Volume mix slightly positive excluding downsizing

Robert Mosco · TD Cowan

Reconcile seemingly contradictory comments about U.S. consumer confidence weakening while North American business expected to improve; can North America achieve low single-digit growth?

U.S. consumer will remain subdued with financial concerns and basket volume flat for 3 years while prices up. But company gaining share through channel shift to value/club and through product performance. Volume and revenue inflection expected in second half driven by successful brands (Sour Patch Kids growing double-digit), innovative platforms (Ritz Drizzle/Bytes), and ventures. Not projecting better category but significant share gains plan.

Shopping basket flat for 3 years in dollar valueWalmart value channel and Costco grew biscuits >4% vs. 0.3% total marketSour Patch Kids projected to grow double-digit for yearSavory gaining share through Ritz innovations and fresh stock

Answers to last quarter's watch list

Q1 adjusted gross margin print against the ~$500M inventory headwind. Adjusted gross margin landed at 30.7%, down 270bps YoY on input cost inflation and unfavorable volume/mix, with the $350M Q1 inventory phasing headwind absorbed as guided (Palmer Q&A confirmed it landed "as expected"). Supply chain productivity is partially offsetting the Middle East cost headwind and input inflation. The 2026 GM line shows YoY pressure, not yet easing. Status: Mixed

Whether chocolate pricing actions in Northern Europe deliver volume recovery or just margin dilution. Company-wide volume/mix improved sharply from -4.8pp to -0.5pp with pricing dropping from +9.9pp to +3.5pp — that is the elasticity reset working at the corporate level. European retailer negotiations "almost entirely complete and in line with planning," share trends improving in chocolate, base business (ex-Easter) turned from share loss to slightly positive. The mechanics are tracking; the next two prints need to confirm the trend doesn't reverse as Easter falls out. Status: Resolved positively

North America volume trajectory off the -3% FY2025 biscuits decline. North America organic inflected to +0.5% from -0.6% in Q4 — the first non-negative print in three quarters. Management committed to volume and revenue inflection in H2 via share-gain mechanisms (Walmart/Costco channel mix, Sour Patch Kids double-digit, Ritz Drizzle/Bytes, ventures close to double-digit). The "structural envelope compression" thesis hasn't softened on the category side, but the share-gain claim is now concrete and falsifiable. Status: Resolved positively (on inflection); the H2 sustainability test remains.

FX tailwind realization vs. the +2.0% revenue / +$0.06 EPS assumption. Reaffirmed unchanged at +~2.0% revenue and +$0.06 EPS. No update to the underlying assumption disclosed in the release. Status: Continue monitoring

Working media / ANC dollar disclosures. The release and Q&A did not isolate a specific YoY SG&A or working-media step-up figure. Management reiterated reinvestment posture through the "absorb Q1 upside" framing, but the quantitative disclosure investors were promised at Q4 has not arrived. Status: Not resolved

Cocoa price trajectory vs. the 3,000/tonne anchor. Management characterized $2,500/tonne as fair fundamental value with industry headed for another year of surplus and average coverage exceeding 10 months. That is below the 3,000/tonne 2027 modeling anchor — which is bullish for the 2027 EPS inflection if it holds, though European cocoa demand was flagged as subdued. Status: Resolved positively

USMCA tariff outcome. The release reiterated outlook is provided in the context of "greater than usual volatility, including geopolitical, trade and regulatory uncertainty." No material U.S. tariff action on Mexican-produced biscuits/chocolate has triggered a guide update. Status: Continue monitoring

What to watch into next quarter

Whether Q2 organic growth holds above 2% as Easter falls out. Q1 at 3.0% includes Easter timing benefit. If Q2 organic drops below the FY flat-to-2% range, the FY trajectory tightens fast and the case for the reaffirm-don't-raise posture weakens.

Adjusted operating margin direction from 11.7%. Q1 OPM compressed 310bps YoY. If Q2 OPM doesn't stabilize with the Middle East cost drag still in the system, the FY adjusted EPS flat-to-5% cc band starts to compress to the low end.

North America organic — does +0.5% extend or fade. Management explicitly committed to H2 volume and revenue inflection. If NA stays in the 0-1% range through Q2, share-gain plan is on track; a return to negative organic puts the 2027 base year at risk.

European volume/mix dynamics ex-Easter. Company-wide vol/mix at -0.5pp benefited from Easter timing. Watch whether the -4.8pp to -0.5pp improvement was a one-quarter Easter-driven optical move or the genuine elasticity reset working.

Quantified working-media / ANC step-up disclosure. The Q4 promise of "meaningful" YoY ANC growth still has no number against it. A Q2 reveal of specific YoY SG&A or media spend would validate the reinvestment thesis; continued silence makes the flat-to-5% EPS guide look like a sandbag.

Free cash flow conversion pace. Q1 FCF at $0.155B against the ~$3B FY guide implies a substantial back-half ramp. Watch H1 cumulative FCF — if YTD is below $1B at Q2, the FCF guide gets stress-tested.

Middle East cost headwind quantification. The CFO acknowledged the Middle East crisis as a new headwind absorbing Q1 upside but did not size it. A specific dollar disclosure would clarify how much of the reaffirmation is genuine caution vs. cost absorption.

Sources

Mondelez International Q1 FY2026 earnings press release, filed via SEC EDGAR, April 28, 2026: https://www.sec.gov/Archives/edgar/data/1103982/000162828026027915/mdlzearningsreleasecontent.htm
Mondelez International Q1 FY2026 earnings call Q&A exchanges (analyst-attributed)
Tapebrief MDLZ Q4 FY2025 brief (prior-quarter context and watch list)
Tapebrief MDLZ Q3 FY2025 brief (multi-quarter tone arc)
Tapebrief MDLZ Q2 FY2025 brief (multi-quarter tone arc)

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