Cadbury-parent Mondelez International forecast annual revenue and profit below Wall Street estimates on Tuesday, as shoppers traded down from its higher-priced chocolates and snacks to cheaper alternatives.

Shares of the Chicago-based company were down over 4% after the bell.

The company had undertaken several rounds of price increases to brace for surging cocoa costs in 2024, alienating inflation-wary, budget-conscious consumers who focus on essentials and turned to cheaper alternatives to Mondelez's brands, weakening sales volumes.

While internationally traded cocoa prices surged by 160%, a global surplus drove down prices by around 50% last year before continuing declines. Mondelez said the vast majority of its 2026 cocoa exposure has been hedged at this point, but at relatively higher prices than current levels.

Consumers in the U.S., besides reining in discretionary spending due to rising living costs, have also been seeking healthier snacking options as they become more conscious of their protein and sugar intakes, forcing packaged food companies to rethink their portfolios.

The company expects its 2026 organic net revenue growth to be between flat and 2%, compared with analysts' estimate of a 3.84% rise, according to data compiled by LSEG.

It sees annual profit growth in the range of flat to 5% on an adjusted basis, compared with expectations of a 8.3% rise.

Volumes for the fourth quarter fell 4.8 percentage points, while prices rose by 9 percentage points. Volumes fell across every regional segment, but price hikes helped boost revenue.

Net revenue rose 9.3% from a year earlier to $10.50 billion for the quarter, above analysts' estimates of $10.31 billion. It earned an adjusted per share profit of 72 cents, compared with analysts' estimates of 70 cents.

Packaged foods giant PepsiCo, which also topped fourth-quarter results on Tuesday, said it will cut prices on core brands such as Lay's and Doritos by up to 15% following a consumer backlash against previous price hikes.