Mondelez Plans Price Rises To Cope With Rising Freight Costs
Mondelez International Inc said on Monday it would hike prices for biscuits, gums, and candies in the United States and certain emerging markets next year to battle rising transportation and freight costs.
The company's shares were up 2.2% at $41 in extended trading, after the Oreo cookie maker also reported a quarterly profit that edged past estimates.
Higher fuel prices, new driver regulations and a shortage of drivers have made moving freight costlier for packaged goods companies.
Mondelez's move comes after rival Hershey Co last week said it would raise prices to ease pressures on margins.
Mondelez's cost-saving efforts, along with lower cocoa prices, helped offset higher freight and logistics costs, driving its adjusted gross margin up 110 basis points to 40.6% in the third quarter ended 30 September.
Analysts on average had expected 39.94%, according to Refinitiv data.
However, the company's net revenue fell 3.7% to $6.29 billion (€5.53 billion). North America, its second-largest market, continued to see declining sales with a 2% fall in organic revenue growth.
Net income attributable to the company rose to $1.19 billion (€1.04 billion), or 81 cents per share, in the third quarter, from $981 million (€862 million), or 64 cents per share, a year earlier.
Excluding items, the company earned 62 cents per share.
Analysts on average had expected a profit of 61 cents per share on revenue of $6.32 billion (€5.55 billion), according to Refinitiv data.