Monster Beverage missed market expectations for second-quarter sales as budget-conscious consumers kept a tight lid on spending, hurting demand for its pricey energy drinks amid an uncertain economic environment.
Higher costs of essentials like food and fuel have prompted consumers in the US to be more mindful about spending on non-essential items, impacting sales for companies such as Monster.
Co-CEO Hilton Schlosberg, stated, "Retailers have reported a reduction in convenience store foot traffic and we have seen a shift at retail towards more mass and dollar channels.
"Other beverage and consumer packaged product companies have also seen a tighter consumer spending environment and weaker demand in the quarter."
Price Increases
Monster will raise prices for its core brands and packages in the United States by about 5%, effective 1 November. Banking on brand power, it has joined other global packaged food makers in steadily raising product prices for the past few quarters, to counter spiralling costs.
For the second quarter, the company posted net sales of $1.90 billion, compared with analysts' average estimate of $2.01 billion, according to LSEG data.
Monster Beverage reported a profit of 41 cents per share for the quarter ended 30 June, compared with analysts' estimate of 45 cents per share.
Quarterly Highlights
Net sales for the company’s Monster Energy Drinks segment increased 3.3%, to $1.74 billion, in the second quarter of 2024, from $1.69 billion in the same quarter last year.
The segment includes the brands Monster Energy drinks, Reign Total Body Fuel high performance energy drinks, Reign Storm total wellness energy drinks, Bang Energy drinks, and Monster Tour Water.
The strategic brands segment reported a year-on-year increase of 9.6%, to $109.2 million. The division includes includes the various energy drink brands acquired from The Coca-Cola Company, as well as its affordable energy brands Predator and Fury.
Net sales in the alcohol brands unit, which is comprised of The Beast Unleashed, Nasty Beast Hard Tea, as well as various craft beers and hard seltzers, decreased 31.9% to $41.6 million, driven by a decline in sales by volume of flavoured malt beverages.
News by Reuters, additional reporting by ESM.
