CORONA, CALIF. — Strength in international markets helped Monster Beverage Corp. deliver growth in the first quarter despite the adverse impact of the coronavirus (COVID-19) pandemic on new product launches in the United States.
New products introduced included three Reign Inferno beverages, two Monster Ultra line extensions, a line of Java Monster 300, a line of Monster Hydro Super Sport as well as NOS Turbo.
“We did not achieve planned distribution levels, in part due to certain retailers postponing implementation of their new planned schematics, which included our innovation products,” said Rodney Cyril Sacks, chairman and chief executive officer at Monster, during a May 7 earnings call. “We are developing plans with our bottlers and distributors to reprioritize these recent innovation launches to ensure that we are able to maximize their distribution as soon as normalcy returns, particularly to the convenience and gas channel.”
Sales to customers outside of the United States increased 26% to $357 million from $284 million and accounted for nearly a third of overall sales.
Net income at Monster Beverage Corp. in the first quarter ended March 31 totaled $279 million, equal to 52¢ per share on the common stock, up 6% from $261 million, or 48¢ per share, in the same period a year ago. Net sales increased 12% to $1.06 billion from $946 million.
Sales for the company’s Monster Energy Drinks segment, which includes the Monster Energy and Reign Total Body Fuel brands, increased 14% to $993 million from $870 million a year ago. Sales for the Strategic Brands segment, which includes energy drink brands acquired from The Cocoa-Cola Co., were down 8% to $64.5 million.
The impact of COVID-19 on first-quarter sales and income was not material, Mr. Sacks said, but the pandemic weighed heavily on sales in April. A shift in consumer channel preferences and package configurations that began during the second half of March has continued into the second quarter.
“Sales in the second quarter have been adversely affected as a result of a decrease in foot traffic in the convenience and gas channel, which is our largest channel,” he said. “There was a lot of stock building and pantry loading that seemed to culminate in the last week in March.”
Mr. Sacks added that he has made a full recovery since testing positive for COVID-19 in March.
“I'm feeling good but for an occasional cough,” he said. “We are fortunate that everyone at our company who has been diagnosed with COVID-19 is doing well and has been making good progress.”