Monster Beverage Reports 2024 First Quarter Results
Monster Beverage reported an 11.8% increase in net sales to $1.90 billion in the first quarter of 2024. Gross profit margin improved to 54.1%, with net income rising to $442.0 million. The company plans to repurchase up to $3.0 billion of common stock and commence a tender offer. International sales rose by 19.5% to $744.1 million, with strong performance in the Monster Energy® Drinks, Strategic Brands, and Alcohol Brands segments. Operating expenses and stock-based compensation increased, but net income per diluted share increased by 12.0% to $0.42.
Record first quarter net sales rose by 11.8% to $1.90 billion.
Gross profit margin improved to 54.1% in the first quarter of 2024.
Net income increased by 11.2% to $442.0 million.
International sales increased by 19.5% to $744.1 million.
Company plans to repurchase up to $3.0 billion of common stock.
Operating expenses increased to $485.1 million, impacting net income.
Stock-based compensation rose to $22.5 million in the first quarter of 2024.
Effective tax rate increased to 23.5% in the first quarter.
Insights
Monster Beverage Corporation's first quarter net sales growth of 11.8% is a robust indication of the company's market performance. However, when adjusted for adverse foreign exchange impacts, the growth figure is even more impressive at 15.6%. This demonstrates the company's ability to expand revenue streams despite currency volatility, which is a significant metric for investor confidence.
The improvement in gross profit margin to 54.1% from 52.8% is also notable. It suggests that the company has successfully navigated supply chain challenges, possibly through strategic pricing actions and cost management, both of which are vital for maintaining profitability in a competitive beverage industry.
The planned tender offer to repurchase up to $3.0 billion of common stock is a powerful signal to the market, often indicating that the company believes its stock is undervalued. This could potentially lead to an increase in the stock price as it not only shows confidence from management but also reduces the number of shares outstanding, thereby increasing earnings per share.
A significant driver of Monster Beverage's growth is the expansion of its international sales, which saw a 19.5% increase and now represent 39% of total net sales. The company's ability to penetrate international markets is critical for long-term growth, especially as the energy drink segment continues to expand globally.
Moreover, the mention of innovative product launches, such as Monster Energy® Ultra Fantasy Ruby Red™ and the introduction of Predator Energy® in the Philippines, indicates a strong innovation pipeline. This is essential for keeping the brand relevant and capturing consumer interest amidst fierce competition in the beverage sector.
The reported increase in operating expenses, including distribution and selling expenses, could be concerning as it may signal rising costs in the company's go-to-market strategy. However, this increase might also reflect investments in marketing and expanded distribution networks, which are important for growth in the consumer goods sector.
Additionally, the segment growth, particularly the 25.6% increase in the Strategic Brands segment and the 21.1% increase in the Alcohol Brands segment, suggest a successful diversification of the company's product portfolio. Diversification can help mitigate risks associated with relying on a single product line and cater to a broader consumer base.
-- Record First Quarter Net Sales Rise 11.8 Percent to
-- Net Sales, Adjusted for Adverse Changes in Foreign Currency of
Rise 15.6 Percent (12.6 Percent Exclusive of Argentina’s Impact) --
-- First Quarter Gross Profit as a Percentage of Net Sales Improves to 54.1 Percent --
-- First Quarter Net Income Increases 11.2 Percent to
-- Company Currently Intends to Commence Tender Offer to Repurchase up to
CORONA, Calif., May 02, 2024 (GLOBE NEWSWIRE) -- Monster Beverage Corporation (NASDAQ: MNST) today reported financial results for the three-months ended March 31, 2024.
Net sales for the 2024 first quarter increased 11.8 percent to
Net sales for the Company’s Monster Energy® Drinks segment, which primarily includes the Company’s Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks, Reign Storm® total wellness energy drinks, Bang Energy® drinks and Monster Tour Water®, increased 10.7 percent to
Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The Coca-Cola Company, as well as the Company’s affordable energy brands Predator® and Fury®, increased 25.6 percent to
Net sales for the Alcohol Brands segment, which is comprised of The Beast Unleashed®, Nasty Beast™ Hard Tea, as well as various craft beers and hard seltzers, increased 21.1 percent to
Net sales for the Company’s Other segment, which primarily includes certain products of American Fruits and Flavors, LLC, a wholly owned subsidiary of the Company, sold to independent third-party customers (the “AFF Third-Party Products”), increased 19.9 percent to
Net sales to customers outside the United States increased 19.5 percent to
Gross profit as a percentage of net sales for the 2024 first quarter was 54.1 percent, compared with 52.8 percent in the 2023 first quarter. The increase in gross profit as a percentage of net sales was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower input costs, partially offset by geographical sales mix.
Operating expenses for the 2024 first quarter were
Distribution expenses for the 2024 first quarter were
Selling expenses for the 2024 first quarter were
General and administrative expenses for the 2024 first quarter were
Operating income for the 2024 first quarter was
The effective tax rate for the 2024 first quarter was 23.5 percent, compared with 20.1 percent in the 2023 first quarter. The increase in the effective tax rate was primarily attributable to the decrease in the stock-based compensation deduction in the 2024 first quarter as compared to the 2023 first quarter.
Net income for the 2024 first quarter increased 11.2 percent to
Hilton H. Schlosberg, Vice Chairman and Co-Chief Executive Officer, said, “We continue to see growth in the energy drink market globally. In the United States, energy is the only segment of the beverage category currently showing unit growth. We continue to grow our sales in non-Nielsen measured channels.
“We achieved another quarter of solid revenue growth, with record first quarter sales. The quarter was again impacted by unfavorable foreign currency exchange rates in certain markets.
“We are pleased to report gross profit margin improvement in the first quarter, which increased significantly when compared to the 2023 first quarter. This improvement was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower input costs, partially offset by geographical sales mix,” Schlosberg said.
Rodney C. Sacks, Chairman and Co-Chief Executive Officer, said, “Innovation continues to play an important role in our strategy and contributed to our record sales in this quarter. We launched a number of new innovation products in the quarter, including Monster Energy® Ultra Fantasy Ruby Red™, Juice Monster® Rio Punch™ and Java Monster® Irish Créme in the United States.
“Predator Energy®, our affordable energy brand, was launched in the Philippines during the quarter.
“In April 2024, we launched Predator Energy® Gold Strike in a non-carbonated formula in a 500 ml PET bottle, in selected provinces in China. Initial response to this product has been positive.
“The Beast Unleashed® is now available in 49 states and we have commenced with distribution of The Beast Unleashed® in 24 oz. single serve cans in the convenience and gas channel. Nasty Beast™, our new hard tea line was launched in 12 oz. variety packs in January 2024 and in 24 oz. single serve cans in February 2024, and is now available in 49 states. Early response to our hard tea line has been positive.
“Our innovation pipeline for both our non-alcoholic and alcoholic beverages remains strong,” Sacks said.
Share Repurchase Program
During the 2024 first quarter, the Company purchased approximately 1.8 million shares of its common stock at an average purchase price of
Intention to Commence Tender Offer
The Company intends to commence a modified “Dutch Auction” tender offer for up to
The Company expects to fund the tender offer with approximately
The Company's Co-CEOs have indicated that they intend to participate in the offer for investment diversification and estate planning purposes. Mr. Sacks' participation, in particular, may provide him some flexibility to consider his own potential options, which may also help the Company continue succession planning for its next phase of leadership. In this regard, after consultation with the Company’s Board, Mr. Sacks is considering reducing his day-to-day management responsibilities starting in 2025, while continuing to manage certain areas of the Company's business for which he has always been responsible. At that time, Mr. Sacks intends to remain Chairman of the Company's Board and Mr. Schlosberg would segue from Co-CEO to CEO.
Investor Conference Call
The Company will host an investor conference call today, May 2, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call will be open to all interested investors through a live audio web broadcast via the internet at www.monsterbevcorp.com in the “Events & Presentations” section. For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.
Monster Beverage Corporation
Based in Corona, California, Monster Beverage Corporation is a holding company and conducts no operating business except through its consolidated subsidiaries. The Company’s subsidiaries develop and market energy drinks, including Monster Energy® drinks, Monster Energy Ultra® energy drinks, Juice Monster® Energy + Juice energy drinks, Java Monster® non-carbonated coffee + energy drinks, Rehab® Monster® non-carbonated energy drinks, Monster Energy® Nitro energy drinks, Reign® Total Body Fuel high performance energy drinks, Reign Inferno® thermogenic fuel high performance energy drinks, Reign Storm® total wellness energy drinks, NOS® energy drinks, Full Throttle® energy drinks, Bang Energy® drinks, BPM® energy drinks, BU® energy drinks, Burn® energy drinks, Gladiator® energy drinks, Live+® energy drinks, Mother® energy drinks, Nalu® energy drinks, Play® and Power Play® (stylized) energy drinks, Relentless® energy drinks, Samurai® energy drinks, Ultra Energy® drinks, Predator® energy drinks and Fury® energy drinks. The Company’s subsidiaries also develop and market still and sparkling waters under the Monster Tour Water® brand name. The Company’s subsidiaries also develop and market craft beers, hard seltzers and flavored malt beverages under a number of brands, including Jai Alai® IPA, Dale’s Pale Ale®, Dallas Blonde®, Wild Basin® hard seltzers, The Beast Unleashed® and Nasty Beast™ Hard Tea. For more information visit www.monsterbevcorp.com.
Caution Concerning Forward-Looking Statements
Certain statements made in this announcement may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws, as amended, regarding the expectations of management with respect to our future operating results and other future events including revenues and profitability. The Company cautions that these statements are based on management’s current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of the Company, that could cause actual results and events to differ materially from the statements made herein. Such risks and uncertainties include, but are not limited to, the following: the intended commencement of the tender offer; the intended
Additional Information Regarding The Tender Offer
This communication is for informational purposes only, is not a recommendation to buy or sell the Company’s common stock and does not constitute an offer to buy or the solicitation of an offer to sell the Company’s common stock. The tender offer described in this communication has not yet commenced, and there can be no assurances that the Company will commence the tender offer on the terms described in this communication or at all. The tender offer will be made only pursuant to an offer to purchase, letter of transmittal and related materials that the Company expects to distribute to its shareholders and file with the U.S. Securities Exchange Commission (the “Commission”) upon commencement of the tender offer. SHAREHOLDERS AND INVESTORS SHOULD READ CAREFULLY THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND RELATED MATERIALS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS OF, AND CONDITIONS TO, THE TENDER OFFER. Once the tender offer is commenced, shareholders and investors will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that the Company expects to file with the Commission at the Commission’s website at www.sec.gov or by calling the Information Agent (to be identified at the time the offer is made) for the tender offer.
(tables below)
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION FOR THE THREE-MONTHS ENDED MARCH 31, 2024 AND 2023 (In Thousands, Except Per Share Amounts) (Unaudited) | |||||||
| Three-Months Ended | |||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Net sales¹ | $ | 1,899,098 | $ | 1,698,930 | |||
| Cost of sales | 871,969 | 801,081 | |||||
| Gross profit¹ | 1,027,129 | 897,849 | |||||
| Gross profit as a percentage of net sales | |||||||
| Operating expenses | 485,138 | 412,785 | |||||
| Operating expenses as a percentage of net sales | |||||||
| Operating income¹ | 541,991 | 485,064 | |||||
| Operating income as a percentage of net sales | |||||||
| Interest and other income, net | 35,754 | 12,496 | |||||
| Income before provision for income taxes¹ | 577,745 | 497,560 | |||||
| Provision for income taxes | 135,696 | 100,116 | |||||
| Income taxes as a percentage of income before taxes | |||||||
| Net income | $ | 442,049 | $ | 397,444 | |||
| Net income as a percentage of net sales | |||||||
| Net income per common share: | |||||||
| Basic | $ | 0.42 | $ | 0.38 | |||
| Diluted | $ | 0.42 | $ | 0.38 | |||
| Weighted average number of shares of common stock and common stock equivalents: | |||||||
| Basic | 1,041,081 | 1,044,909 | |||||
| Diluted | 1,051,282 | 1,059,069 | |||||
| Energy drink case sales (in thousands) (in 192-ounce case equivalents) | 211,430 | 182,444 | |||||
| Average net sales per case2 | $ | 8.69 | $ | 9.03 | |||
1Includes
2Excludes Alcohol Brands segment and Other segment net sales.
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 (In Thousands, Except Par Value) (Unaudited) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 2,576,524 | $ | 2,297,675 | ||||
| Short-term investments | 984,201 | 955,605 | ||||||
| Accounts receivable, net | 1,370,239 | 1,193,964 | ||||||
| Inventories | 939,630 | 971,406 | ||||||
| Prepaid expenses and other current assets | 124,580 | 116,195 | ||||||
| Prepaid income taxes | 40,340 | 54,151 | ||||||
| Total current assets | 6,035,514 | 5,588,996 | ||||||
| INVESTMENTS | 8,162 | 76,431 | ||||||
| PROPERTY AND EQUIPMENT, net | 923,290 | 890,796 | ||||||
| DEFERRED INCOME TAXES, net | 175,271 | 175,003 | ||||||
| GOODWILL | 1,417,941 | 1,417,941 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,430,762 | 1,427,139 | ||||||
| OTHER ASSETS | 107,126 | 110,216 | ||||||
| Total Assets | $ | 10,098,066 | $ | 9,686,522 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 533,729 | $ | 564,379 | ||||
| Accrued liabilities | 204,679 | 183,988 | ||||||
| Accrued promotional allowances | 318,895 | 269,061 | ||||||
| Deferred revenue | 43,776 | 41,914 | ||||||
| Accrued compensation | 52,638 | 87,392 | ||||||
| Income taxes payable | 75,111 | 14,955 | ||||||
| Total current liabilities | 1,228,828 | 1,161,689 | ||||||
| DEFERRED REVENUE | 198,759 | 204,251 | ||||||
| OTHER LIABILITIES | 92,690 | 91,838 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - 1,124,870 shares issued and 1,041,698 shares outstanding as of March 31, 2024; 1,122,592 shares issued and 1,041,571 shares outstanding as of December 31, 2023 | 5,624 | 5,613 | ||||||
| Additional paid-in capital | 5,034,948 | 4,975,115 | ||||||
| Retained earnings | 6,381,785 | 5,939,736 | ||||||
| Accumulated other comprehensive loss | (157,940 | ) | (125,337 | ) | ||||
| Common stock in treasury, at cost; 83,172 shares and 81,021 shares as of March 31, 2024 and December 31, 2023, respectively | (2,686,628 | ) | (2,566,383 | ) | ||||
| Total stockholders' equity | 8,577,789 | 8,228,744 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 10,098,066 | $ | 9,686,522 | ||||
| CONTACTS: | Rodney C. Sacks |
| Chairman and Co-Chief Executive Officer | |
| (951) 739-6200 | |
| Hilton H. Schlosberg | |
| Vice Chairman and Co-Chief Executive Officer | |
| (951) 739-6200 | |
| Roger S. Pondel / Judy Lin | |
| PondelWilkinson Inc. | |
| (310) 279-5980 |
FAQ
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