Monster Beverage Q3 Earnings Show Mixed Results Amid Challenges

Monster Beverage's third-quarter earnings report reveals a complex picture. While net sales see a slight increase, gross profit is impacted by inventory reserves and legal expenses. Forward-looking statements suggest potential growth despite current hurdles.

Date: 08-11-2024

AI Rating: 5

Earnings Per Share (EPS): Diluted earnings per share for the 2024 third quarter decreased 11.7% to $0.38 from $0.43 in the third quarter of 2023. Adjusted diluted earnings per share after making various adjustments decreased 1.6% to $0.40 per share compared to $0.41 per share in the 2023 comparable quarter.

Revenue Growth: Monster Beverage achieved record third-quarter net sales of $1.88 billion in 2024, which is a 1.3% increase compared to the 2023 figure of $1.86 billion. On a foreign currency adjusted basis, net sales increased by 4.7%. The company reported an increase in sales for the month of October 2024, estimating it to be approximately 5% higher than the comparable October 2023 sales.

Net Income: Net income decreased by 18.1% to $370.9 million compared to $452.7 million in the third quarter of 2023. The adjustments mentioned earlier reduced net income by a total of $21.5 million.

Profit Margins: Gross profit for the third quarter was adversely impacted by a $10.6 million increase in inventory reserves in the alcohol brands segment. Gross profit as a percentage of net sales was 53.2%, up from 53% in the third quarter of 2023. When excluding the alcohol brands inventory reserves, gross profit percentage was 53.7%.

Free Cash Flow (FCF): The text does not provide specific information regarding Free Cash Flow.

Return on Equity (ROE): The text does not provide specific information regarding Return on Equity.

Overall, while there is an uptick in revenue and market share in certain regions, the decrease in net income, earnings per share, and the adverse margin impacts due to increased expenses pose potential risks for Monster Beverage's stock performance.

Stocks: MNST