Monster Beverage Corporation (MNST Quick QuoteMNST - Free Report) delivered mixed first-quarter 2025 results, wherein the bottom line beat the Zacks Consensus Estimate while the top line missed. Earnings increased year over year, while sales declined.

The company has seen growth opportunities in household penetration and per capita consumption, and robust demand for energy drinks. It has introduced several products in the reported quarter. In the United States, Monster Energy Ultra Blue Hawaiian has been among the top-selling products. Innovation has been playing a major role. MNST continues to launch its affordable energy brands, Predator and Fury, in various markets across the world. However, the Alcohol Brands unit has been putting pressure on the company’s financial results. 

In the reported quarter, the impact of tariffs on MNST’s operating results was immaterial. Management highlighted that the tariff backdrop is complicated and dynamic. The company will recognize tariffs on aluminum via the higher Midwest premium and has been reviewing mitigation actions across its business. AAF, its flavor and concentrate subsidiary, intends to establish a facility in Brazil, likely to be operational later in 2026. The company remains excited about its innovation pipeline in 2025.

Monster Beverage’s adjusted earnings of 47 cents per share beat the Zacks Consensus Estimate of 46 cents and increased 10.2% year over year.

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Net sales of $1.85 billion lagged the Zacks Consensus Estimate of $1.98 billion. The top line fell 2.3% year over year, due to bottler/distributor ordering patterns in the United States and EMEA, unfavorable foreign currency exchange rates, lower sales in the Alcohol Brands segment, adverse weather, one less selling day in the reported quarter and uncertain economic conditions.

Excluding the Alcohol Brands segment, net sales, on a foreign-currency adjusted basis, rose 1.9% in the first quarter. Excluding the Alcohol Brands unit, management estimates that year-to-date gross billings, on a foreign currency adjusted basis, through April 30, 2025, were roughly 6.9% higher and 5.8% higher, including the Alcohol Brands segment.

Monster Beverage’s shares have gained 25.8% in the past three months compared with the industry’s 8.5% growth.

A Peek Into MNST’s Q1 Performance

Monster Beverage has been reviewing opportunities for price increases domestically and internationally.

Per the Nielsen reports for the four weeks through April 26, 2025, sales in dollars in the energy drink category in the convenience and gas channel, including energy shots, jumped 8.9% year over year. Sales of the company’s energy drink brands, including Bang, increased 6.8% in the latest four weeks in the convenience and gas channel. Sales of Monster climbed 8.2%. Reign’s sales dipped 6%, NOS was up 1.9% and Full Throttle dipped 1.7%. Sales of Red Bull increased 15.2%.

According to Nielsen, for the four weeks ended April 26, 2025, MNST’s market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, fell to 36.4% from 37.1%, including Bang. The company’s shares fell to 29% from 29.2%. Reign’s share dipped 0.4 of a share point to 2.6%. NOS’ share dropped 0.1 of a share point to 2.5%. Full Throttle’s share declined to 0.6% from 0.7%. Bang’s share was 1.7%. Red Bull’s share jumped two share points to 36.8%.

In Europe, the Middle East and Africa (EMEA), net sales dropped 2.6%, while in Asia-Pacific (APAC), sales rose 10.4%. Sales in Latin America, including Mexico and the Caribbean, fell 3.1%.

Net sales to customers outside the United States slipped 1.5% to $733.2 million, representing about 40% of the total net sales. On a currency-adjusted basis, sales to customers outside the United States jumped 6.2% to $790.5 million.

Insights Into MNST’s Segmental Performance

Monster Energy Drinks: Sales of this segment, which includes Monster Energy drinks, Reign Total Body Fuel high-performance energy drinks, Reign Storm total wellness energy drinks and Bang Energy drinks, fell 0.6% to $1.72 billion. The segment’s sales included a negative impact of $50.8 million from adverse currency rates. On a currency-adjusted basis, net sales for the segment rose 2.2%.

Strategic Brands: The segment includes a range of energy drink brands acquired from Coca-Cola, as well as the company’s affordable energy brands, Predator and Fury. The segment’s net sales dropped 9.3% year over year to $98.3 million, mainly owing to the timing differences in concentrate sales. Currency headwinds hurt sales by $6.6 million. On a currency-adjusted basis, net sales for the segment dipped 3.3%.

Alcohol Brands: Net sales for the segment, which includes The Beast Unleashed, Nasty Beast Hard Tea and several craft beers and hard seltzers, plunged 38.1% year over year to $34.7 million. The decline was led by the reduced sales volumes of The Beast product line and the launch of the Nasty Beast Hard Tea product line in the year-ago period.

Other: Net sales for the segment, which includes some products of American Fruits & Flavors, LLC, sold to independent third parties (AFF Third-Party Products), rose 8% year over year to $6 million.

MNST’s Costs & Margins

The cost of sales was $806.6 million, down 7.5% year over year. The company’s gross margin expanded 240 basis points (bps) year over year to 56.5%, buoyed by supply-chain optimization and pricing.

Operating expenses fell 1.4% to $478.2 million, while the metric, as a percentage of net sales, was 25.8%, increasing 30 bps from the year-earlier quarter. Distribution expenses dipped 17.8% to $77.6 million and as a percentage of net sales, contracted 80 bps to 4.2%.

Selling expenses dipped 1.2% to $172.3 million, but expanded 10 bps to 9.3% as a percentage of net sales. General and administrative expenses for the first-quarter were $228.4 million, up 5.6% from the year-ago quarter.

Adjusted operating income, exclusive of the Alcohol Brands segment, jumped 7.9% to $591.2 million.

MNST’s Financial Health

This Zacks Rank #3 (Hold) company ended 2024 with cash and cash equivalents of $1.9 billion and total stockholders' equity of $6.5 billion.

During the reported quarter, the company did not repurchase any shares under its current share repurchase program. As of May 8, 2025, roughly $500 million was available for buyback under its existing share repurchase program.

MNST repaid $175 million on its term loan facility in the first quarter and subsequently repaid $200 million in April. This satisfied the entire outstanding borrowings under such facility. As of May 8, 2025, the company’s revolving credit facility was unused and wholly available.

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