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Mondelez CEO: Oreo Parent Company Can Sustain 3% Topline Growth

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Mondelez CEO: Oreo Parent Company Can Sustain 3% Topline Growth

Snack and food maker Mondelez International Inc (NASDAQ: MDLZ) should be able to sustain a topline growth rate of at least 3% moving forward, CEO Dirk Van de Put said Tuesday on "Bloomberg Markets: European Close."

Growth Outlook: Mondelez's business has exposure to both at-home consumption through snacks and away-from-home items like candy bars and gum, Van de Put said in reaction to the company's third quarter earnings release.

Naturally, the work-from-home trend benefited the at-home category at the expense of the away-from-home category. As economies reopen, the opposite effect could play out, the CEO said.

Mondelez's product portfolio is well-balanced to sustain 3% top line growth into 2021, he said.

Related Link: Mondelez International: Q3 Earnings Insights

No Panic Buying: Mondelez's retail clients are asking the company for more inventory to stock their shelves ahead of a potential uptick in grocery purchases, Van de Put said.

The CEO said there's no reason to believe we will see the same level of "panic" that was seen in March. 

For example, biscuit sales were up 12% in the U.S. in the early weeks of the pandemic and are now up 6% year-over-year, he said. While this may increase to 7% or 8%, it won't return to 12%, Van de Put said. 

SKU Cuts: Mondelez is lowering its stock-keeping unit count by 25%, but what the company is eliminating represents just 2% of total sales, Van de Put said. The number itself "seems big," the financial impact is very limited, the CEO said. 

The company expects to mitigate the lost sales by presenting alternative options to consumers and through cost-saving measures, he said. 

"It should benefit our bottom line, it should benefit our cash flow." 

MDLZ Price Action: Mondelez shares were trading 0.98% higher at $54.96 at last check Wednesday. 

 

 

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Posted-In: Bloomberg Markets Dirk Van de Put food snacksEarnings News Management Media Best of Benzinga

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