Energy drink company Monster Beverage (NASDAQ:MNST) fell short of analysts' expectations in Q2 CY2024, with revenue up 2.5% year on year to $1.90 billion. It made a GAAP profit of $0.41 per share, improving from its profit of $0.39 per share in the same quarter last year.
Is now the time to buy Monster? Find out by accessing our full research report, it's free.
Monster (MNST) Q2 CY2024 Highlights:
- Revenue: $1.90 billion vs analyst estimates of $2.01 billion (5.6% miss)
- EPS: $0.41 vs analyst expectations of $0.46 (11% miss)
- Gross Margin (GAAP): 53.6%, up from 52.5% in the same quarter last year
- Market Capitalization: $52.94 billion
Hilton H. Schlosberg, Vice Chairman and Co-Chief Executive Officer, said, “The energy drink category in the United States and in certain other countries experienced lower growth rates in the second quarter. Retailers have reported a reduction in convenience store foot traffic and we have seen a shift at retail towards more mass and dollar channels. Other beverage and consumer packaged product companies have also seen a tighter consumer spending environment and weaker demand in the quarter.
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Beverages and Alcohol
These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the explosion of alcoholic craft beer drinks or the steady decline of non-alcoholic sugary sodas. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.
Sales Growth
Monster is one of the larger consumer staples companies and benefits from a well-known brand, giving it customer mindshare and influence over purchasing decisions.
As you can see below, the company's annualized revenue growth rate of 12.8% over the last three years was solid for a consumer staples business.
This quarter, Monster's revenue grew 2.5% year on year to $1.90 billion, falling short of Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 10.6% over the next 12 months, an acceleration from this quarter.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Key Takeaways from Monster's Q2 Results
We struggled to find many strong positives in these results. Its revenue unfortunately missed analysts' expectations and its EPS missed Wall Street's estimates. This quarter featured some positives but overall could have been better. The stock traded down 8.1% to $46.45 immediately after reporting.
Monster may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.