Monster Beverage Corp
Q4 2022 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.71%.
Did MNST Beat Earnings? Q4 2022 Results
Monster Beverage delivered a disappointing finish to 2022, missing on both the top and bottom lines as currency headwinds and rising input costs overshadowed the company's underlying momentum. Fourth-quarter revenue came in at $1.51 billion, up 6.2% year-over-year but falling short of the $1.60 billion consensus estimate by 5.32%, while earnings per diluted share of $0.57 trailed the $0.63 analyst forecast by 9.52%. The primary culprit was a potent combination of unfavorable foreign currency movements totaling $81.90 million and gross margin compression driven by higher ingredient, packaging, and co-packing costs, which squeezed margins to 51.8% from 53.9% a year earlier. Management pointed to phased price increases planned through the first half of 2023 and the expected depletion of higher-cost imported can inventories as key levers for margin recovery, while the rollout of its new Beast Unleashed flavored malt beverage toward national distribution by year-end 2023 signals continued investment in diversifying beyond its core energy drink business.
- Price increases effective September 1, 2022 in the United States and continued international price increases positively impacted gross profit margins
- Energy drink category continues to expand globally
- Strong currency-adjusted international growth of 22.9%
- Sequential quarterly improvement in gross margin percentage from 51.3% in Q3 to 51.8% in Q4
- Energy drink case sales increased to 166.2 million from 153.5 million year-over-year
“We are pleased to report another quarter of continued revenue growth. The energy drink category continues to expand globally. The results from our overseas operations were again overshadowed by the strength of the United States dollar in the quarter. Gross profit margin percentages increased on a sequential quarterly basis as a result of our pricing actions, as well as certain of our supply chain challenges moderating.”
Monster Beverage CEO, on the earnings call
Forward Guidance & Outlook
Management indicated that certain price increases are being implemented on a phased approach during the first half of 2023, in addition to pricing actions already taken in 2022. Higher-cost imported can inventories in the United States and EMEA are expected to be fully utilized during 2023, which should provide margin relief. Some of the cost increases experienced in 2022 are believed to be transitory, though cost inflation in energy (particularly in EMEA), ingredients, other inputs, and co-packing fees remain challenging. The company plans to expand The Beast Unleashed flavored malt beverage into additional markets in Q2 2023 with a goal of national distribution by year-end. Reign Storm is planned for retail launch in March 2023. The Monster brand is expected to transition to the Coca-Cola distribution system in the Philippines in Q2 2023.
MNST YoY Financials
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MNST Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.