Business Watch

Monster Beverage Pushes Global Expansion Further

Energy drinks maker Monster Beverage (MNST) unveiled plans to further grow its global footprint and introduce new products after higher earnings and sales in the second quarter failed to meet the market’s expectations.

Net sales at the Corona, California-based company jumped by 8.7% to $1.10 billion during the three months that ended June 30, from $1.02 billion a year ago, but still lagged the $1.13 billion average analyst estimate compiled by Capital IQ.

Group turnover, which was negatively affected by foreign currency exchange rates, for the company’s Energy Drinks segment, which primarily includes drinks such as Reign Total Body Fuel, rose by 9.6% year-over-year in the June quarter, according to an earnings statement. Net foreign revenue surged by 16.8%, with overseas sales as a percentage of group turnover rising by 200 basis points to about 31%.

Sales hit a “record, driven by Reign Total Body Fuel energy drinks launched in the first quarter, as well as growth in Monster Energy both domestically and internationally,” Chief Executive Officer Rodney Sacks said in the statement. The “Monster Energy brand was launched in a number of new countries during the quarter in the Middle East, Latin America, and the Caribbean,” he added.

In line with higher sales, earnings also advanced, increasing by 11.9% to $0.53 per share, from $0.48 per share a year earlier, but still trailed the $0.56 market consensus.

The miss was partly due to a 120 basis-point drop in gross profit margin, primarily attributable to geographical and product sales mix as well as increases in certain other input costs. Operating expenses as well as general and administrative costs also rose.

Energy drinks maker Monster Beverage (MNST) unveiled plans to further grow its global footprint and introduce new products after higher earnings and sales in the second quarter failed to meet the market’s expectations.

Net sales at the Corona, California-based company jumped by 8.7% to $1.10 billion during the three months that ended June 30, from $1.02 billion a year ago, but still lagged the $1.13 billion average analyst estimate compiled by Capital IQ.

Group turnover, which was negatively affected by foreign currency exchange rates, for the company’s Energy Drinks segment, which primarily includes drinks such as Reign Total Body Fuel, rose by 9.6% year-over-year in the June quarter, according to an earnings statement. Net foreign revenue surged by 16.8%, with overseas sales as a percentage of group turnover rising by 200 basis points to about 31%.

Sales hit a “record, driven by Reign Total Body Fuel energy drinks launched in the first quarter, as well as growth in Monster Energy both domestically and internationally,” Chief Executive Officer Rodney Sacks said in the statement. The “Monster Energy brand was launched in a number of new countries during the quarter in the Middle East, Latin America, and the Caribbean,” he added.

In line with higher sales, earnings also advanced, increasing by 11.9% to $0.53 per share, from $0.48 per share a year earlier, but still trailed the $0.56 market consensus.

The miss was partly due to a 120 basis-point drop in gross profit margin, primarily attributable to geographical and product sales mix as well as increases in certain other input costs. Operating expenses as well as general and administrative costs also rose.

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