Monster Beverage Corp missed Wall Street estimates for second-quarter sales as higher cost of living weighed on demand for its pricier energy drinks and alcohol brands, sending its shares down 3.4% after the bell.
Consumers have curbed non-essential spending as disposable incomes remain pressured by rising interest rates and higher food prices.
Like Coca-Cola and PepsiCo, Monster Beverage also implemented price hikes as it fights pressures from higher raw material costs and labour expenses.
This coupled with easing cost of freight and aluminium cans from pandemic-highs helped the company post second-quarter gross profit as a percentage of net sales of about 52.5%, compared with 47.1%, a year ago.
Earlier this week, Monster Beverage announced the acquisition of Bang Energy brand owner Vital Pharmaceuticals, Inc.
Performance Highlights
Still, operating expenses rose to $450.4 million from $406.9 million a year ago.
Net sales rose to $1.85 billion from $1.66 billion a year ago, compared with analysts' average estimate of $1.87 billion, according to Refinitiv data.
Monster Beverage's profit of 39 cents came in line with expectations.
Hilton H Schlosberg, vice chairman and co-chief executive officer, said, "We are seeing sustained growth in the energy drink market in the United States, as well as internationally.
"We are pleased to report another quarter of continued revenue growth, with record sales for our second fiscal quarter. The quarter was again impacted by unfavourable foreign currency exchange rates."
Rodney C Sacks, chairman and co-chief executive officer, added, "During the second quarter, we continued our roll-out of our first flavoured malt beverage alcohol product, The Beast Unleashed, in the United States.
"We are pleased with the results of the launch to date and are continuing to expand distribution into additional markets, with the goal of being national by the end of the year."
