Mondelēz International beat third-quarter revenue and profit estimates on Tuesday on a rebound in demand and higher prices.
The Cadbury parent’s efforts to provide its product at different price points drove a sequential improvement in sales volumes.
Demand for the company’s products held steady, as the prices of its sweets and biscuits ranging from $3 to $4 helped in appealing customers who have been opting for cheaper alternatives.
Its quarterly volumes rose 0.3 percentage points, while prices were up 5.1 percentage points.
A rebound in demand in the regions including Europe, North America and China helped the Toblerone maker overcome dipping volumes in Latin America.
Mondelēz echoed recovering in volumes as its peer General Mills, which saw demand improve in certain categories.
'Everyday Indulgences'
Easing prices of gasoline and an uptick in job growth in the US have been encouraging customers to spend on discretionary items, including food and apparel.
Mondelēz’s CEO Dirk Van de Put said, “Consumers are continuing to embrace chocolate and biscuits as everyday indulgences.”
He added that consumers have remained loyal to their favourite brands.
An analyst at Gimme Credit, Dave Novosel, said, “The strength of the Mondelēz brands suggests that private label products will have trouble making meaningful inroads into the company’s market share.”
Benefits from lower manufacturing costs and higher product prices further helped Mondelēz in expanding its adjusted gross profit margin by 230 basis points to 40.5%.
Shares of the company, which maintained its annual forecasts, were volatile after rising by about 2% after the bell.
The company’s quarterly net revenue of $9.20 billion beat analysts’ average estimates of $9.11 billion, according to data compiled by the London Stock Exchange Group.
Its adjusted profit of 99 cents per share in the quarter ending 30 September topped estimates of 85 cents per share.
Mondelēz also said that it has agreed to acquire a majority stake in Evirth, a manufacturer of cakes and pastries in China.
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