Competition is coming for Monster Beverage

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For almost two decades, Monster Beverage (NASDAQ: MNST) has been a pioneer in the energy drink category, originating from its origins as a manufacturer of natural soft drinks, Monster saw early on that consumer tastes could shift from traditional favorites Between it and arch rival Red Bull, Monster failed just creating a new category, but also taking an impressive part of the new market for years, yet Monster's success has finally encouraged others to try to break into the energy beverage market, and that could pose a new threat to Monster's long-term dominance of the industry. . "data-reactid =" 1[ads1]1 "> For almost two decades, Monster Beverage (NASDAQ: MNST) has been a pioneer in the energy drink category. Originating from its origins as a manufacturer of natural soft drinks, Monster saw early on that consumer tastes could shift from traditional favorites to new categories. Between it and arch rival Red Bull, Monster not only created a new category but also took an impressive part of the new market for years. Still, Monster's success has finally encouraged others to try to break into the energy drink market, and it could pose a new threat to Monster's long-term dominance of the industry.

<p class = "canvas atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "Comes Wednesday's financial report for second quarter, Monster Beverage investors wanted to see continued strong gains in revenues and revenues.The sample numbers were not as good as most had hoped, and it questions whether competition is actually having more impact on the results of the energy drink giant than previously expected. "data-reactid =" 12 "> In Wednesday's second-quarter financial report, Monster Beverage investors wanted to see continued strong gains in revenue and earnings. Monster numbers were not as good as most had hoped, and it has some questioning whether competition actually has more impact on the energy drink giant's results than previously thought.

Monster Beverage needs a drink

Monster Beverage & # 39; s second quarter results were solid, but relatively unimpressive. Revenues rose 8.7% to $ 1.10 billion, depending on the 11% growth rate that most of those who followed the stock had wanted to see. Net income of $ 292.5 million was up 8.3% from the year-earlier level and generated $ 0.53 earnings per share. This figure fell below the consensus earnings forecast among investors of $ 0.56 per share.

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Image Source: Monster Beverage.

The usual dynamics among Monster's main segments rose during the quarter. The Monster Energy beverage division, which includes all of the company's older beverages, had sales growth of nearly 10%. This would be even greater had it not been for the strong US dollar, which took away about two percentage points of extra growth on the top line. Solid performance from Monster Energy-branded drinks and Reign Total Body Fuel contributed to the segment's results.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) -sm" type = "text" content = "However, Monster's other segment did not agree with The strategic brand division, which includes energy drinks purchased as part of Monster's partnership with Coca-Cola (NYSE: KO) saw revenues fall 0.8% from the previous year's level. Here too, currency effects had a negative impact, but it is clear that Monster has not emphasized growth in these brands, especially. Elsewhere, the third-party product segment remained insignificant, although sales fell more than 10% compared to last year's second quarter. " -reactid = "28"> However, Monster's other segment did not agree with the energy segment's standards. The Strategic Branded Division, which includes energy drinks purchased as part of Monster's partnership with Coca-Cola (NYSE: KO) saw sales fall 0.8% from previous year's levels. Again, currency effects had a negative impact, but it is clear that Monster has not emphasized growth in these brands to a great extent. Elsewhere, the third-party product segment was negligible, although sales fell more than 10% compared to last year's second quarter.

Monster continued to attract international customers. Net sales jumped 17% internationally to $ 343.3 million, accounting for more than 30% of Monster's total revenue. Sales of cases also improved and increased by more than 9.5 million cases to 119.6 million. Average sales prices increased by $ 0.01 to $ 9.18 per case.

Can Monster Beverage Keep Up the Energy?

Chief Executive Rodney Sacks seemed pleased with the report. "We are pleased to report gross and net sales in the second quarter of 2019," said Sacks, "driven by our high performance energy drink from Reign Total Body Fuel, which we launched in the first quarter." The CEO also attributed gains in the inheritance of the Monster Energy brand to the company's overall success.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Looking ahead, Monster still looks good new drinks from Monster Energy brand will be introduced in the US and elsewhere, and the less expensive predator line should see greater availability worldwide in the near future, which will be especially important as other companies begin to enter For example, recently, Coca-Cola recently announced its plans to launch its own energy drink under the Coca-Cola brand – a move that surprised many given the two companies' partnerships. "data-reactid =" 32 " > Looking ahead, Monster still sees plenty of room for growth. New beverages from the Energy brand will be introduced in the US and elsewhere, and the less expensive predator line should see greater availability worldwide in the near future. This will be especially important when other companies start entering the energy drink arena. For example, Coca-Cola recently announced its plans to launch its own energy drink under the Coca-Cola brand – a move that has surprised many given the two companies' partnerships.

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