Monster Beverage Reports 2024 Third Quarter Financial Results

Core Insights - Monster Beverage Corporation reported a 1.3% increase in net sales for the third quarter of 2024, reaching $1.88 billion compared to $1.86 billion in the same period last year [5][16] - The company experienced a decrease in net income per diluted share, which fell to $0.38 in Q3 2024 from $0.43 in Q3 2023 [17][16] - Adjusted net income per diluted share also decreased to $0.40 from $0.41 year-over-year [17][16] Financial Performance - Net sales excluding the Alcohol Brands segment, adjusted for adverse foreign currency changes of $62.8 million, increased by 5.0% [5][26] - Gross profit margin for Q3 2024 was 53.2%, slightly up from 53.0% in Q3 2023, with gross profit adversely impacted by inventory reserves in the Alcohol Brands segment [11][16] - Operating expenses rose to $519.9 million in Q3 2024 from $473.2 million in Q3 2023, representing 27.6% of net sales compared to 25.5% in the prior year [12][16] Segment Performance - The Monster Energy® Drinks segment saw a 0.8% increase in net sales to $1.72 billion, while the Strategic Brands segment grew by 14.0% to $112.6 million [6][7] - The Alcohol Brands segment experienced a 6.0% decline in net sales to $39.8 million, primarily due to decreased sales volume of craft beers [8] - Net sales to international customers increased by 3.6% to $760.1 million, accounting for approximately 40.4% of total net sales [10] Market Trends and Management Commentary - The energy drink category continues to grow globally, although growth rates in the U.S. have slowed [18][19] - The company has implemented a price increase of approximately 5.0% on its brands, effective November 1, 2024 [21] - Innovation remains a key focus, with new product launches receiving positive consumer responses [22][24] Nine-Month Results - For the nine months ended September 30, 2024, net sales increased by 5.0% to $5.68 billion, with a foreign currency adjusted increase of 8.6% [26] - Net income for the nine-month period decreased by 2.0% to $1.24 billion, while adjusted net income increased by 1.0% to $1.26 billion [29]