Mondelez International Inc., the maker of snacks such as Oreo cookies and Ritz crackers, dropped in early trading after reducing its full-year sales forecast.
The shares declined as much as 2.8 per cent after the company said that sales excluding the effects of acquisitions, divestitures and currency exchange-rate fluctuations would rise as much as 2.5 per cent, down from a previously projected maximum of 3 per cent. Revenue fell 1.8 per cent to $8.44 billion in the second quarter, the Illinois-based company said in a statement. Analysts had estimated $8.68 billion.
Chief financial officer David Brearton said that revenue “remains challenged” because of weaker growth and higher prices that have deterred some customers. Mondelez expects growth to improve in the second half, helped by lower coffee prices, Brearton said in the statement.
Mondelez cut costs last quarter amid pressure from activist investor Nelson Peltz. Profit excluding some items was 40 cents a share, topping the 39-cent average of estimates compiled by Bloomberg. Selling, general and administrative expenses declined 10 per cent.
Peltz’s Trian Fund Management LP, which owns almost 2.5 per cent of Mondelez, has pushed chief executive officer Irene Rosenfeld to boost profit margins amid slowing growth in once-booming emerging markets. The company named Peltz to its board in January, after Trian abandoned a proposal for Mondelez to merge with PepsiCo Inc. to spur growth.
Bloomberg News, edited by ESM
