Mondelez International Inc Class A MDLZ

The travails of the pandemic started to emerge in wide-moat Mondelez’s second-quarter results, as underlying sales edged up a mere 0.7% over the prior-year period--a marked stepdown from the 6.4% organic levels posted in the first quarter--while adjusted gross and operating margins deteriorated to the tune of 90 and 80 basis points, respectively, to 39.7% and 15.9%. The sales corrosion was concentrated in emerging markets (30% of sales, down 5.1%), attributable to the closure of the traditional trade channels in several countries including Mexico (in line with sentiment from peers). Further, the profit hit reflects the incurrence of more than $130 million in costs (labor, safety, sanitation, and supply chain) stemming from COVID-19.