Monster Beverage Corporation reported financial results for the three months ended September 30, 2023.

Net sales for the 2023 third quarter increased 14.3% to $1.86 billion, from $1.62 billion in the comparable period last year. Net changes in foreign currency exchange rates had an unfavourable impact on net sales for the 2023 third quarter of $29.2 million. Net sales on a foreign currency adjusted basis increased 16.1% in the 2023 third quarter.

Net sales for the Company’s Monster Energy Drinks segment, which primarily includes the Company’s Monster Energy drinks, Reign Total Body Fuel high performance energy drinks, Reign Storm total wellness energy drinks and Bang Energy drinks, increased 13.7% to $1.71 billion for the 2023 third quarter, from $1.50 billion for the 2022 third quarter. 

Net changes in foreign currency exchange rates had an unfavourable impact on net sales for the Monster Energy® Drinks segment of approximately $20.2 million for the 2023 third quarter. Net sales on a foreign currency adjusted basis for the Monster Energy Drinks segment increased 15.1% in the 2023 third quarter.

Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The Coca-Cola Company, as well as the Company’s affordable energy brands, increased 11.2% to $98.8 million for the 2023 third quarter, from $88.8 million in the 2022 third quarter. 

Net changes in foreign currency exchange rates had an unfavourable impact on net sales for the Strategic Brands segment of approximately $9.0 million for the 2023 third quarter. Net sales on a foreign currency adjusted basis for the Strategic Brands segment increased 21.3% in the 2023 third quarter.

Net sales for the Alcohol Brands segment, which is comprised of The Beast Unleashed which was launched in the 2023 first quarter, as well as the various craft beers and hard seltzers purchased as part of the CANarchy transaction on February 17, 2022, increased 57.8% to $42.3 million for the 2023 third quarter, from $26.8 million in the 2022 third quarter.

Net sales for the Company’s Other segment, which primarily includes certain products of American Fruits and Flavors, LLC, a wholly owned subsidiary of the Company, sold to independent third-party customers (the “AFF Third-Party Products”), increased 3.9% to $6.7 million for the 2023 third quarter, from $6.4 million in the 2022 third quarter.

Net sales to customers outside the United States increased 20.2% to $733.7 million in the 2023 third quarter, from $610.6 million in the 2022 third quarter. Such sales were approximately 40% of total net sales in the 2023 third quarter, compared with 38% in the 2022 third quarter. Net sales to customers outside the United States, on a foreign currency adjusted basis, increased 24.9% in the 2023 third quarter.

Gross profit as a percentage of net sales for the 2023 third quarter was 53.0%, compared with 51.3% in the 2022 third quarter. The increase in gross profit as a%age of net sales was primarily the result of pricing actions in certain markets, decreased freight-in costs and decreased aluminium can costs. Gross profit as a%age of net sales was 53.4% for the 2023 third quarter, excluding the Bang Inventory Step-Up.

Net income for the 2023 third quarter increased 40.4% to $452.7 million, from $322.4 million in the 2022 third quarter. Net income per diluted share for the 2023 third quarter increased 41.3% to $0.43, from $0.30 in the third quarter of 2022. Net income per diluted share, adjusted for the Bang Transaction Gain, the Bang Inventory Step-Up and the Bang Transaction Expenses was $0.41 for the 2023 third quarter.

Hilton H. Schlosberg, Vice Chairman and Co-Chief Executive Officer, said, “The energy drink market in the United States, as well as internationally, continues to grow. We are pleased to report another quarter of solid revenue growth, with record sales for our third quarter. The quarter was again impacted by unfavourable foreign currency exchange rates.

“Gross profit margins in the quarter improved significantly as compared to the 2022 third quarter, primarily as a result of pricing actions, decreased freight-in costs and decreased aluminum can costs.   Gross profit margins also improved sequentially from the previous quarters. Promotional allowances as a percentage of net sales for the 2023 third quarter were higher than in the comparable 2022 third quarter.

“On July 31, 2023, we completed the Bang Transaction. The Bang Inventory Step-Up adversely impacted consolidated gross margins,” Schlosberg added.