Even with rising sales figures, Monster Beverage Corporation remains focused on repairing its image over touting its permanence at the top of the energy drink market.
The company reported Thursday that its 2014 first quarter gross sales increased 10.6 percent to $613.7 million, compared to $555 million from the same quarter in 2013. Net sales from the first quarter, which ended on March 31, increased 10.7 percent to $536.1 million from $484.2 million in 2013.
However, despite the uptick in sales, the company’s tone seems to indicate that the figures fell short of expectations. In a company release, Monster stated that its results continue to be influenced by the costs of regulatory matters and litigation concerning the advertising, marketing, formulation and usage of its products. Monster paid about $5 million for these service costs in the first quarter of 2014, compared to $3 million from the same quarter last year. In response, Monster CEO Rodney Sacks didn’t start his post-earnings report conference call by celebrating the numbers. Instead, he returned to a familiar position for energy drink proponents — a position of defense.
“We reiterate that our products are safe,” Sacks said in a statement. “More than 10 billion Monster Energy drinks have been sold and safely consumed around the world over the past 12 years. The long history of safe use of products containing caffeine in the U.S. remained unchanged.”
Sacks said that the U.S. Food and Drug Administration has stated that recent studies haven’t indicated any previously unknown risks associated with caffeine consumption and that caffeine consumption in the U.S. has remained stable despite the growing number of products on the market.
He added that the main sources of caffeine for people aged 18 or less is coffee, soft drinks and tea, not energy drinks. As energy drink advocates so often do, Sacks brought up Starbucks. He said that a 16 oz. coffee at Starbucks contains approximately 350 milligrams of caffeine, more than double the approximately 160 milligrams of caffeine in the same-sized Monster Energy drink.
Other Monster figures to note:
While Monster’s first quarter gross sales represent a 10.6 percent increase from the same quarter in 2013, the number represents a decrease from its $621.1 million in gross sales from the fourth quarter of 2013.
Gross profit for the first quarter of 2014 was 53.5 percent, compared to 52.1 percent from the same quarter last year.
Operating income increased 38.7 percent to $148.9 million, compared to $107.3 million from the same quarter last year.
Net income increased 50 percent to $95.3 million, compared to $63.5 million from the same quarter last year.
Net sales for the company’s DSD segment increased 11.8 percent to $514.4 million, compared to $460.2 million from the same quarter last year.
Gross sales to consumers outside the U.S. increased 10.4 percent to $144.3 million, compared to $130.7 million from the same quarter last year.
During the quarter, Monster released two new energy drinks: Punch Monster Baller’s Blend and Punch Monster Mad Dog. The products serve as replacements for the company’s Dub Edition products.
During the quarter, Monster began production in Japan, the company’s tenth co-packing facility outside of the U.S.
Monster stock closed at $66.12 per share on May 8, the day of the report’s release. That figure fell the next day to below $64 and, at press time, sits at $65.75.