Summary
Monster Beverage Corporation reported strong revenue growth for the second quarter and first half of 2018, driven by robust performance in its core Monster Energy® Drinks segment. Net sales increased by 12.0% in the second quarter and 13.2% for the first half, reaching $1.02 billion and $1.87 billion, respectively. This growth was fueled by increased sales volume both domestically and internationally. Despite rising input costs and increased promotional spending, the company managed to improve net income by 21.3% for the quarter and 21.4% for the half-year, reaching $270.1 million and $486.2 million, respectively. The adoption of ASC 606, a new revenue recognition standard, had a notable impact, reclassifying certain commissions and reducing reported net sales by $12.2 million for the quarter and $22.2 million for the half-year, while also impacting operating expenses. The company also benefited from a lower effective tax rate due to the Tax Cuts and Jobs Act of 2017, contributing significantly to the rise in net income. Monster Beverage also continued its aggressive share repurchase program, demonstrating a commitment to returning capital to shareholders.
Financial Highlights
47 data points| Revenue | $1.02B |
| Cost of Revenue | $395.62M |
| Gross Profit | $620.26M |
| Operating Expenses | $262.64M |
| Operating Income | $357.62M |
| Net Income | $270.12M |
| Shares Outstanding (Basic) | 1.12B |
| Shares Outstanding (Diluted) | 1.13B |
Key Highlights
- 1Net sales increased by 12.0% to $1.02 billion in Q2 2018 and by 13.2% to $1.87 billion in the first half of 2018, driven by the Monster Energy® Drinks segment.
- 2Net income rose by 21.3% to $270.1 million in Q2 2018 and by 21.4% to $486.2 million in the first half of 2018.
- 3Gross profit margin decreased to 61.1% in Q2 2018 (from 64.3% in Q2 2017) and to 60.8% in H1 2018 (from 64.5% in H1 2017) due to increased promotional allowances, higher input costs, and changes in sales mix.
- 4Operating income saw a modest increase of 2.2% to $357.6 million in Q2 2018 and 3.8% to $637.5 million in H1 2018, impacted by higher operating expenses.
- 5The company benefited from a lower effective tax rate of 24.6% in Q2 2018 (down from 35.9% in Q2 2017) and 24.0% in H1 2018 (down from 34.6% in H1 2017) due to the Tax Cuts and Jobs Act.
- 6Monster Beverage Corp actively engaged in share repurchases, authorizing $500 million in new programs during the period, reflecting a strong focus on capital return to shareholders.
- 7The adoption of ASC 606, the new revenue recognition standard, resulted in a reclassification of certain commissions, reducing reported net sales by $12.2 million in Q2 and $22.2 million in H1 2018.