Monster Beverage missed Wall Street estimates for third-quarter sales and profit, as cost-conscious consumers cut back spending on its higher-priced beverages.
Consumers, especially from low to middle-income groups, have been curbing their cravings for branded non-alcoholic drinks and opting for cheaper alternatives.
This has hurt sales of companies like Monster Beverage, Keurig Dr Pepper and PepsiCo, while Coca-Cola was able to attract customers with tight budgets in the United States.
Quarterly Highlights
For the third quarter, the company posted net sales of $1.88 billion (€1.75 billion), compared with analysts' average estimate of $1.91 billion (€1.78 billion), according to data compiled by LSEG.
On an adjusted basis, it posted profit of 40 cents per share, compared with estimates of 43 cents per share.
"Hurricanes Helene and Milton impacted sales at retail in certain states in September and October, however we cannot determine the impact on our business," said CEO Hilton Schlosberg.
However, benefits from taking 5% price hikes during the quarter ended 30 September, coupled with lower input costs helped the company's margins.
Monster's quarterly gross profit as a percentage of sales was 53.2%, compared to 53.0% a year ago.
Divisional Performance
Net sales in the Monster Energy Drinks segment grew 0.8% to $1.72 billion (€1.60 billion) in the third quarter of 2024.
The segment includes Monster Energy drinks, Reign Total Body Fuel high performance energy drinks, Reign Storm total wellness energy drinks and Bang Energy drinks.
The Strategic Brands segment saw net sales double-digit growth of 14% to $112.6 million (€104.72 million), with foreign currency exchange rates having an unfavourable impact.
The division includes the various energy drink brands acquired from The Coca-Cola Company, as well as the affordable energy brands Predator and Fury.
Net sales un the Alcohol Brands segment, which is comprised of The Beast, Nasty Beast Hard Tea and various craft beers and hard seltzers, declined 6% year on year during the quarter.
The company’s Other segment, which includes certain products of American Fruits and Flavors, LLC, decreased 11.5% year on year during the quarter.
News by Reuters, additional reporting by ESM.
