Why Mondelēz shares rose 4% on Wednesday

Confident comments from an executive from Mondelēz International (MDLZ 4.18%) about the company’s immediate future boosted its share price on Wednesday. The food company’s stock rose more than 4 percent largely as a result, on a day when S&P 500 the index fell marginally by 0.2%.

Unpacking fresh growth

The person behind the rosy statements was Mondelēz’s CFO Luca Zaramella. Speaking at a consumer staples industry conference, he sounded upbeat about his company’s current quarter. He said, without elaborating, that he posted “solid numbers” for July and August, adding: “I think you’ll be happy with the numbers you’re going to see in Q3.”

Getting into the weeds a bit, he cited low prices for cocoa — a key ingredient in the many chocolate products the company sells — as a factor in recent improvements in profitability. He suggested that the resulting lower costs give management the opportunity to increase promotional activities for relatively slow-moving goods.

Overall, management is counting on 2024 to be a growth year. In July, it released second-quarter numbers and provided guidance for net revenue growth ranging from 3% to 5%. It also models adjusted earnings per share growth in the high single digits on a constant currency basis.

A latecomer no more

Since that earnings report, typically lagging stocks have outperformed the S&P 500 by 12% to less than 2%. Investors are clearly buying this growth story and anticipated increases in key fundamentals; it will now be up to management to deliver.