By Annie Gasparro
Mondelez International Inc. is making gains thanks to higher prices and growing appetite for snacks.
The Deerfield, Ill.-based food maker on Tuesday said its brands, including Oreo cookies, Ritz crackers and Cadbury chocolate, are benefiting from rising sales in emerging markets and new points of sale in the U.S., including discount grocers. Other food makers including Hershey Co. and Pringles-owner Kellogg Co. have said demand for snacks and higher prices have buoyed sales in recent months.
"There's an ongoing stream of new snacks appearing," Mondelez Chief Executive Dirk Van de Put said in an interview.
Comparable sales rose 4.2% in the company's latest quarter. Mondelez raised its expectation for sales growth this year to 3.5% from 3% previously.
In North America, though, competition from startups and niche brands focused on simple ingredients and high-protein diets is weighing on the company. Comparable sales in North America rose 2.5% in the quarter thanks mostly to higher prices Mondelez instituted to offset rising ingredient and shipping costs.
Shares traded roughly flat after hours.
Higher costs and supply-chain problems in Latin America pulled down Mondelez's adjusted gross-profit margin by one percentage point in the quarter. Mr. Van de Put said Mondelez doesn't plan to raise prices to boost margins.
"Getting more volumes through the plants is the best way to do that," he said. But he said the company will rely on price increases to cover commodity cost pressures, which it expects will be the same next year as this year.
Mondelez's overall revenue for the third quarter increased to $6.36 billion, up from $6.29 billion a year ago. Analysts polled by FactSet predicted $6.34 billion.
The company reported a profit of $1.42 billion, or 98 cents a share, up from $1.19 billion, or 81 cents a share, last year. The company's profit of 64 cents a share, following adjustments, exceeded expectations by four cents.
--Micah Maidenberg contributed to this article.
Write to Annie Gasparro at firstname.lastname@example.org
(END) Dow Jones Newswires
October 29, 2019 18:37 ET (22:37 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.