Monster Beverage Corporation reported double-digit net sales growth in Q1 2024, rising +11.8% to over $1.9 billion, according to the energy drink manufacturer’s latest earnings report this week.
- Net sales for the Monster Energy Drinks segment, including the core Monster brand, Reign, Bang, and Monster Tour Water, were up 10.7% to around $1.73 billion in Q1, compared to $1.56 billion in 2023.
- Net sales of the Strategic Brands segment, including Full Throttle, NOS, Fury and Predator, was up 25.6% to $108.4 million in the quarter, versus $86.4 million in 2023.
- Alcohol brands, including The Beast Unleashed, Nasty Tea, and craft beers and hard seltzers, grew 21.1% to $56.1 million, compared to $46.3 million last year.
“We continue to see growth in the energy drink market globally,” said Monster vice chairman and co-CEO Hilton Schlosberg in a statement. “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.”
Accompanying the earnings this week was the announcement of a succession plan for Monster chairman and co-CEO Rodney Sacks, who has served as chief executive of the company for over 30 years. Sacks said he is “considering” reducing his responsibilities sometime next year with plans for Schlosberg to eventually take over as the sole CEO, while Sacks will remain on the board as chairman. A full timeline for the transition was not provided.
Sacks stepback will be in coordination with an upcoming “Dutch Auction” tender offer of up to $3 billion, which the co-CEOs intend to participate in. Sacks said he believes the stock buyback opportunity will provide him “flexibility” to begin winding down his day-to-day responsibilities at Monster.
Profit and Expenses
Gross profit as a percentage of net sales in Q1 2024 was 54.1%, compared to 52.8% in Q1 2023. The increase was attributed to lower freight and input costs and pricing actions in select markets.
Operating expenses in the quarter were $485.1 million, up from $412.8 million in 2023. Distribution expenses also rose, up to $94.4 million (5% of net sales) compared to $76.3 million (4.5% of net sales) the prior year.
Selling expenses grew as well to $174.4 million (9.2% of net sales), versus $149 million (8.8%) last year. General and administrative expenses were $216.3 million (11.4%), up from $187.4 million (11%) last year.
Emerging Brands
Speaking during a call with analysts and investors yesterday, Schlosberg said sales of Bang have accelerated over the last four weeks as the company continues to focus on rejuvenating the brand it acquired last year following the bankruptcy of its former owner Vital Pharmaceuticals.
“We believe it’s moving positively,” Schlosberg said. “The marketing for the brand has really been a low ebb, and it’s gaining momentum as we move into the summer. We’re in the process of accelerating … a large influence platform to help move and accelerate the brand. So the marketing is underway, it’s just taking a little bit of time to get it up and moving.”
Monster has also continued to grow its alcohol ambitions, with The Beast Unleashed malt drink now distributed in 49 states. The brand has now rolled out in 24 oz. single-serve cans for the convenience and gas channel.
Hard tea offering Nasty Beast launched in 12 oz. variety packs in January and in 24 oz. single-serve cans in February, and is likewise now on shelf in 49 states.
“Our innovation pipeline for both our non-alcoholic and alcoholic beverages remains strong,” Sacks said in a statement.