Vending

Monster Beverage Q3 revenue jumps 9.9%, beats expectations

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November 6, 2020

Monster Beverage Corp.'s net sales for the 2020 third quarter ending Sept. 30, 2020 increased 9.9% percent to $1.25 billion from $1.13 billion in the same period last year, beating expectations by $30 million, according to Seeking Alpha.

Despite the ongoing impact of the COVID-19 pandemic, the company achieved record third quarter net sales and the highest quarterly net sales in the company's history, according to an earnings release.

Net income for the 2020 third quarter increased 16.3% to $347.7 million from $298.9 million in the 2019 third quarter. Net income per diluted share for the 2020 third quarter increased 19.6% to 65 cents from 55 cents in the third quarter of 2019.

Shares traded at $83.68 Thursday against a 52-week range of $50.06-$87.05.

The company's sales in the 2020 second quarter were initially adversely affected as a result of a decrease in foot traffic in the convenience and gas channel, which is the company's largest channel, but improved sequentially from the latter half of the 2020 second quarter and throughout the 2020 third quarter.

The e-commerce, club store, mass merchandiser and grocery and related business continued to increase in the quarter, while its foodservice on-premise business, which is a small channel for the company, remained challenged.

Net sales for the company's Monster Energy drinks segment, which primarily includes the company's Monster Energy drinks and Reign Total Body Fuel high performance energy drinks, increased 9.6% to $1.16 billion for the 2020 third quarter, from $1.06 billion for the 2019 third quarter. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the Monster Energy drinks segment of approximately $11.6 million for the 2020 third quarter.

Net sales for the company's strategic brands segment, which primarily includes the various energy drink brands acquired from The Coca-Cola Co., as well as the company's affordable energy brands, increased 12.0% to $74.3 million for the 2020 third quarter from $66.3 million in the 2019 third quarter.

Net sales for the company's other segment, which includes certain products of American Fruits and Flavors, LLC, a wholly-owned subsidiary of the company, sold to independent third party customers were $8.6 million for the 2020 third quarter compared with $5.9 million in the 2019 third quarter.

Net sales to customers outside the United States increased 17.0% to $444.5 million in the 2020 third quarter, from $379.8 million in the 2019 third quarter. Such sales were approximately 36% of total net sales in the 2020 third quarter, compared with 34% in the 2019 third quarter.

Gross profit, as a percentage of net sales, for the 2020 third quarter was 59.1%, compared with 59.4% in the 2019 third quarter.

"The company performed well in the third quarter, achieving record quarterly net sales, despite the ongoing impact of the COVID-19 pandemic in most of our markets," CEO Rodney C. Sacks said in a press release. "The COVID-19 pandemic remains a heightened threat with a number of countries, particularly in EMEA, reinstituting lockdowns and other restrictions."

The company does not foresee a material impact on the ability of its co-packers to manufacture and its bottlers/distributors to distribute its products as a result of the COVID-19 pandemic. In addition, the company is not experiencing significant raw material or finished product shortages, and its supply chain remains intact.

For an update on how the coronavirus pandemic is affecting convenience services, click here.