Mondelēz International Inc narrowly missed Wall Street estimates for quarterly profit as price hikes failed to offset the impact of higher raw material costs and logistical expenses due to supply chain bottlenecks.
Packaged food makers have been struck by soaring shipping and labor expenses due to a strained supply chain, while surging demand for wheat, sugar and other commodities has driven up raw material costs, crimping margins across the sector.
The Chicago-based chocolatier said its gross margin declined to 37% in the fourth quarter from 39.4% a year earlier, sending its shares down about 3% in extended trading.
To offset the impact of higher costs, Mondelēz, like peers Conagra Brands and Kraft Heinz, resorted to price hikes which, along with strong demand in emerging markets, helped boost its revenue.
The Cadbury chocolate maker, however, warned of an 8-cent hit to its full-year adjusted earnings per share from foreign currency translation, adding it would decrease net revenue growth by about 2.5%.
Mondelēz revenue rose 4.9% to $7.66 billion (€6.87 billion) in the fourth quarter ended 31 December, topping analysts' average estimate of $7.59 billion (€6.8 billion).
Excluding items, the Ritz crackers maker earned 71 cents per share in the reported quarter, on a constant-currency basis, falling short of analysts' estimate by 1 cent, according to Refinitiv IBES data.
Last month, the Oreo cookies maker joined a growing list of US firms to put off their return-to-office plans as COVID-19 cases surged across the country due to the fast-spreading Omicron variant. It also recently announced plans to expand its sustainability efforts.