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Key Takeaways
- Monster posted second-quarter revenue and profit below analysts’ consensus expectations.
- Co-CEO Hilton Schlosberg said the energy drinks sector has been hit by declining convenience store foot traffic.
- The company plans to implement a 5% price increase on November 1.
Monster Beverage (MNST) shares sank Thursday, a day after co-Chief Executive Officer (CEO) Hilton Schlosberg acknowledged headwinds in the energy drinks sector in the company’s second-quarter earnings report.
“The energy drink category in the United States and in certain other countries experienced lower growth rates in the second quarter,” Schlosberg said. “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.”
Q2 Sales, EPS Miss Analysts’ Estimates
In the second quarter, Monster reported earnings per share (EPS) of 41 cents on net sales that rose 2.5% year-over-year to $1.90 billion, both shy of analysts’ consensus estimates compiled by Visible Alpha.
The company also reiterated that a roughly 5% price increase is coming to its core brands and packages in the U.S. starting November 1.
Shares of Monster fell more than 10% to $45.25 as of 11 a.m. ET Thursday. They are roughly 21% lower this year.