Mondelez International (Nasdaq:MDLZ) beat Q1 2026 EPS and Revenue estimates, with emerging markets growing 6.3% and European chocolate returning to share gains. Full-year EPS guidance was reaffirmed as incremental Middle East costs offset a stronger-than-expected start.

Key Highlights

  • Q1 2026 EPS of $0.67 beat the consensus estimate of $0.61 by 9.84%, with Revenue of $10.08 billion exceeding forecasts of $9.75 billion by 3.4%.
  • Emerging markets, representing approximately 40% of the Business, grew 6.3% in the quarter with broad-based Volume and category strength.
  • European chocolate returned to positive share trends, supported by a strong Easter season and the expanding Biscoff Partnership.
  • Gross Margin declined 270 basis points year-over-year, primarily due to elevated cocoa cost coverage, though productivity gains partially offset the headwind.
  • Full-year 2026 EPS guidance was reaffirmed, with management directing any upside reinvestment into Brand and commercial momentum rather than Earnings upgrades.

A Stronger Start Than Expected

Mondelez International (Nasdaq:MDLZ) opened 2026 with results that came in ahead of its own internal expectations. Revenue of $10.08 billion and EPS of $0.67 both exceeded consensus estimates by meaningful margins, driven by broad-based outperformance across emerging markets and a gradual recovery in developed market execution. The quarter benefited from a concentrated Easter season, the continued commercial traction of the Biscoff Brand collaboration, and disciplined Supply chain management that partially cushioned the elevated cocoa cost environment.

Emerging Markets Remain the Growth Engine

Emerging markets delivered 6.3% growth in Q1, with Volume mix up approximately 0.5% overall. India posted strong double-digit growth in both chocolate and biscuits, aided by a GST rate change that boosted consumption and the successful launch of Biscoff biscuits, which sold out immediately. Brazil grew high single digits across biscuits, chocolate, and gum. China delivered mid-single-digit growth, supported by a strong Chinese New Year and continued expansion of the Evirth cakes and pastries Business acquired in prior periods. Mexico was flat in the quarter due to softness in candy and powdered beverages, though the broader portfolio remained healthy.

Management characterised the emerging market growth as sustainable, noting underpenetrated categories, long distribution runways, and the early-stage application of Revenue growth management tools as structural tailwinds that should persist beyond the near term.

Developed Markets: Gradual Improvement Taking Hold

North America delivered slightly positive net Revenue growth in Q1, with share gains in crackers led by Ritz and strong momentum in Sour Patch Kids, which management expects to grow double digits for the full year. The U.S. consumer remains cautious, with purchasing power constrained and Demand shifting toward value, club, and online channels. Oreo faced a softer limited-time offer versus the prior year, though management indicated plans to reinvest in the Brand for the remainder of 2026.

In Europe, retailer negotiations were substantially complete and executed in line with planning. The chocolate category performed well through Easter, with share trends in several markets turning from negative to marginally positive. The Biscoff Partnership continued to expand, with new launches in emerging markets and strong early momentum in Australia and New Zealand. Management noted no signs of consumer trade-down in European chocolate, though acknowledged that sustained high energy prices stemming from the Middle East conflict represent the primary risk to consumer confidence in the region.

Cocoa and Middle East Costs Absorb the Upside

Gross Margin declined 270 basis points year-over-year, reflecting the elevated cost of cocoa coverage carried into 2026. The CFO noted the industry's average forward coverage currently exceeds ten months, the highest in recent memory, following a period of opportunistic buying when prices fell to multi-year lows earlier in the year. Current spot levels of approximately $2,500 per tonne are viewed by management as broadly consistent with Supply and Demand fundamentals, with a modest further decline possible as another surplus year appears likely.

The Middle East conflict introduced unbudgeted incremental production and logistics costs in certain regulated markets where hedging is not permissible. Management indicated these costs are manageable but sufficient to justify holding full-year EPS guidance flat rather than upgrading it, with any further Earnings upside directed toward accelerating Brand Investment and commercial reinvestment.

Conclusion

Mondelez's Q1 2026 results confirm that its strategy of investing in emerging market distribution, premium innovation, and Brand partnerships is compounding effectively. The decision to reaffirm rather than raise guidance reflects disciplined Capital allocation rather than weakness in the underlying Business trajectory, with management signalling that 2027 EPS growth remains the primary financial objective.