Monster Beverage’s (MNST) Q1 Earnings Fall Short, Despite Yearly Sales Increase

• Monster Beverage Corporation’s Q1 2024 results fall short of Zacks Consensus Estimate, despite year-over-year improvements.
• Adjusted earnings of 42 cents per share and net sales of $1.90 billion reported.
• Shares of the Zacks Rank #3 (Hold) company have gained 5.9% in the past three months.

Monster Beverage Corporation’s Q1 2024 results miss estimates, yet show year-over-year growth. The company’s shares have seen a 5.9% increase over the past three months.

Monster Beverage Corporation’s Q1 2024 Results

Monster Beverage Corporation reported its first-quarter 2024 results, with both the top and bottom lines falling below the Zacks Consensus Estimate. However, both metrics showed year-over-year improvement, driven by the expansion of the energy drinks category and product launches. The company’s adjusted earnings of 42 cents per share missed the Zacks Consensus Estimate of 44 cents, but advanced 10.5% year over year. Net sales of $1.90 billion improved 11.8% year over year but lagged the consensus estimate of $1.92 billion. Unfavorable currency translations hurt net sales by $64.4 million. On a currency-adjusted basis, net sales rose 15.6%.

Segmental Performance and Financials

Monster Energy Drinks, Strategic Brands, Alcohol Brands, and Other are the four segments of Monster Beverage Corporation. The Monster Energy Drinks segment, which includes Monster Energy drinks, Reign Total Body Fuel high-performance energy drinks, and True North Pure Energy Seltzers, saw net sales increase 10.7% year over year to $1.73 billion. The Strategic Brands segment, which includes a range of energy drink brands acquired from Coca-Cola, saw net sales grow 25.6% year over year to $108.4 million. The Alcohol Brands segment saw net sales jump 21.1% year over year to $56.1 million. The Other segment, which includes some products of American Fruits & Flavors sold to independent third parties, grew 19.9% year over year to $5.5 million.

Monster Beverage ended first-quarter 2024 with cash and cash equivalents of $2.6 billion and total stockholders’ equity of $8.6 billion. Short-term investments, as of Mar 31, 2024, were $984.2 million. The company bought back 1.8 million shares worth $97.2 million. As of May 2, 2024, it had $642.4 million remaining under the previously authorized share repurchase plan.

Industry Outlook

Despite the missed estimates, shares of Monster Beverage Corporation have gained 5.9% in the past three months, outperforming the industry’s 4.2% decline. The company’s performance can be attributed to the expansion of the energy drinks category and product launches. Other stocks from the Consumer Staple sector, namely Coca-Cola FEMSA, Vita Coco Company, and Diageo, also show promising growth.

Conclusion

Monster Beverage Corporation’s Q1 2024 results may have missed estimates, but the company’s year-over-year growth and outperformance of the industry indicate a positive outlook. The company’s strategic brand acquisitions and product launches have contributed to its growth, and its share repurchase plan reflects its strong financial position.