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Mondelez Falls as Labor Crunch, Higher Input Prices Weigh -Breaking

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© Reuters.

By Dhirendra Tripathi

Investing.com – Mondelez stock (NASDAQ:) fell 4.2% Friday after the Oreo cookie maker warned of continued struggles with labor shortages and more expensive raw materials.

“We are entering 2022 with low inventories, so we are working hard to rebuild inventory levels,” Reuters quotes Mondelez Chief financial Officer Luca Zaramella telling analysts on a phone call.

Cadbury and Toblerone’s chocolate maker expects that 2022 will see high-single digit cost inflation. However, it plans to counter this with price rises and other steps to increase revenue.

Additionally, it warned about an 8-cent impact on full-year adjusted earnings by share due to foreign currency conversion. This would also reduce net revenue growth by approximately 2.5%.

The pandemic increased demand for beverages and cookies, but it also caused a serious shortage in raw materials. This was compounded by a shortage of labor and congestion at ports, as well as the fact that almost everything became more costly. In Mondelez’s case, a six-week strike of about 1,000 workers in August at its U.S. plants made matters worse. 

Due to higher volumes and product prices, quarterly revenues rose by 5% to $7.7 trillion. Like sales, adjusted profit per share (72 cents) was higher than estimates.

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