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Monster Beverage 8-K Report, Financial Results (Feb 28, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 28, 2024
Period End
February 28, 2024
Security
MNST
In the record · 2016–202610-K1210-Q328-K97

MNST filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 97 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’18Mar ’18
  2. Leadership change8-K · Jan ’21Jan ’21
  3. Auditor change8-K · Jan ’23Jan ’23
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed February 28, 2024. Cited figures are marked; the original filing is the authoritative source.

Monster Beverage (MNST) reported fourth-quarter and full-year 2023 results on February 28, 2024 that point to strong top-line momentum, with some offsetting noise from the Alcohol Brands segment.

Q4 net sales rose 14.4% to $1.73 billiona (up 16.1% on a foreign-currency-adjusted basis), and full-year net sales rose 13.1% to $7.14 billion (up 15.5% currency-adjusted). Net income for Q4 grew 21.6% to $367.0 million, and full-year net income increased 36.9% to $1.63 billion, with diluted EPS of $1.54 for the year. Gross margin expanded to 54.2% in Q4 and 53.1% for the full year, helped by pricing actions, lower freight-in costs and lower input costs.

Profitability was affected by $39.9 millionb of impairment charges in the Alcohol Brands segment, tied to continuing weakness in craft beer and hard seltzer categories, and a roughly $5.0 million Bang inventory step-up charge in Q4. Excluding these items, Q4 net income would have been $401.5 million (up 33.1%) and diluted EPS $0.38. Management said the Bang Energy acquisition has been integrated and is performing as expected.

Strategic Brands sales were roughly flat in Q4 as reported (down 1.3%), though up 7.7% on a currency-adjusted basis. Balance-sheet and capital-return items were also notable. Cash and cash equivalents rose to $2.30 billionc, and roughly $642.4 million remained under existing buyback authorizations as of February 27, 2024, after $43.2 million of Q4 repurchases.

This filing contains only the earnings press release and is unaudited; the full audited financial statements and footnotes will come in the Form 10-K. The filing also notes that the Company's results remain heavily dependent on its relationship with The Coca-Cola Company and are subject to the risks described in the forward-looking statements section.

02—Key points

Key Highlights

  1. Q4 2023 net sales rose 14.4% to a record $1.73 billion (16.1% currency-adjusted); full-year net sales rose 13.1% to $7.14 billion.
  2. Gross margin improved to 54.2% in Q4 (54.5% excluding the Bang inventory step-up) and 53.1% for the full year, up from 50.3% in 2022.
  3. Q4 net income increased 21.6% to $367.0 million; adjusted net income (excluding Alcohol impairments and the Bang step-up) rose 33.1% to $401.5 million.
  4. Full-year 2023 net income rose 36.9% to $1.63 billion, with diluted EPS of $1.54 versus $1.12 in 2022.
  5. $39.9 million of Alcohol Brands impairment charges in Q4 reflect ongoing weakness in craft beer and hard seltzer categories.
  6. Q4 operating expenses rose to 29.2% of net sales from 25.8%, driven by G&A (including impairments) and higher selling expenses.
  7. The Company repurchased about 0.8 million shares for $43.2 million in Q4, with about $642.4 million left under authorized programs as of February 27, 2024.

03—Questions

Frequently Asked Questions

  1. Was 2023 a strong year for Monster Beverage's core business?

    Yes. Energy drink sales drove the results: Monster Energy Drinks segment sales grew 15.1% in Q4, and full-year energy drink case sales rose to about 769 million 192-ounce case equivalents from about 702 million in 2022. Average net sales per case also increased to $9.01 from $8.82.

  2. How much did the Alcohol Brands impairments affect earnings?

    The $39.9 million in Q4 impairment charges reduced operating income and net income. Excluding these charges and the Bang inventory step-up, Q4 net income would have been $401.5 million, and diluted EPS would have been $0.38 instead of $0.35.

  3. Why did gross margins improve so much?

    Management attributed the improvement mainly to pricing actions in certain markets, lower freight-in costs and lower input costs. Q4 gross margin reached 54.2%, up from 51.8% a year earlier.

  4. Is this filing audited, and where can investors find the full financial statements?

    No. The figures in this 8-K are unaudited, and the press release excludes certain financial statements, footnotes and other information. These will be included in the Company's Annual Report on Form 10-K for 2023.

  5. What are the main risks highlighted in the filing?

    The forward-looking statements cite dependence on The Coca-Cola Company, the risks of alcoholic beverage operations and litigation, successful integration of Bang Energy, changing consumer preferences, health and regulatory scrutiny, raw material and supply constraints, and retailer and distributor decisions.

04—Continue

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