UPDATE 2-Mondelez cuts sales target after price hike backlash
(Adds CEO quotes)
By Anjali Athavaley
Aug 6 (Reuters) - Mondelez International Inc, the maker of Cadbury chocolate and Oreo cookies, cut its 2014 sales target on Wednesday after price hikes to cover commodity costs sparked a backlash by consumers and retailers in some European markets.
Mondelez also reported higher net income in the second quarter, topping Wall Street estimates.
Mondelez said higher cocoa and dairy prices this year prompted the price increases to customers, especially in places like Venezuela and Argentina with high inflation.
Since competitors have been slow to follow, the company said, some retailers have stopped selling Mondelez products altogether.
"While we anticipated that this would be disruptive in the short term, it has been even more challenging than we expected," Irene Rosenfeld, chairman and chief executive officer, said on the quarterly earnings conference call. She added that she expected the impact to be temporary as competitors catch up with price hikes and the gap closes.
The company said it was reducing its 2014 net organic revenue growth target to a range of 2 percent to 2.5 percent. In May, it forecast growth of about 3 percent. Organic revenue excludes changes in foreign currency, takeovers and acquisitions.
"In Europe, some large retailers reacted badly to the price increases, and temporarily removed products from the shelves," Alexia Howard, an analyst at Sanford Bernstein, said in a research note. "It sounds as though this is now behind them and so we believe this was a temporary hit to sales this quarter." Continuación...