Even as its net sales continued to rise, Monster Beverage’s quarterly profits failed to hit Wall Street’s target, which it blamed in part on distributor terminations, a strong US dollar and shortages of two of its energy-drink products.
California-based Monster — the maker of buzzy beverages like Monster Energy and Mutant Super Soda said that revenue for the quarter ending March 31 rose 9 per cent from the year-ago period to $742.1m, beating the $738.5m that analysts surveyed by Bloomberg had expected. Net income was $178m, an 8.6 per cent year-over-year increase but short of the $185.2m that Wall Street was looking for. Net income per diluted share was 31 cents, a penny short of the 32 cents analysts had forecast.
Monster — which surged last quarter after a big revenue beat — said that its per-share earnings after tax took a 2-cent hit due to expenses associated with terminating distributor agreements in the wake of its strategic partnership with soda giant Coca-Cola. The two companies entered into an agreement in 2014 that saw Coca-Cola take a stake in the energy-drink maker and become Monster’s preferred global distribution partner.
Rodney Sacks, Monster’s chief executive, said that a strong greenback continued to take a bite out of Monster’s results, as did product shortages affecting its Java Monster coffee energy drink and Muscle Monster, a protein-packed “energy shake” targeting gym buffs.
Monster shares, which have declined 5 per cent over the past 12 months, fell 1.5 per cent in after-hours trading.