uploads///MNST Sales Preview Q

Can Monster Beverage’s Sales Exceed Expectations in 2Q15?


Dec. 4 2020, Updated 10:42 a.m. ET

Second-quarter results preview

Monster Beverage (MNST) will announce its results for the second quarter of 2015 after the close of financial markets on August 6. The second quarter ended on June 30, 2015. The consensus Wall Street analyst net sales estimate is $754.9 million. This represents an expected 9.8% growth compared to the net sales in the second quarter of the previous year.

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Performance in the previous quarter

Monster Beverage’s comparable net sales in 1Q15 increased by 9.5% to $587 million on a year-over-year basis, driven by higher sales of Monster Energy brand energy drinks. However, the company missed the consensus Wall Street analyst net sales estimate of $597.5 million. The comparable revenue in 1Q15 excluded deferred revenue of $39.8 million associated with the termination of distribution agreements. Currency headwinds affected 1Q15 net sales by $12 million.

The company’s adjusted EPS of $0.62 in 1Q15 missed the consensus Wall Street analyst estimate of $0.68. The bottom line in 1Q15 included $206 million of costs related to the termination of Monster Beverage’s distribution agreements with third-party distributors.

Partnership with Coca-Cola

The termination of distribution agreements with third parties is part of the company’s deal with Coca-Cola (KO), under which Coca-Cola will be the preferred global distribution partner of Monster Beverage. The deal closed on June 12, with Coca-Cola completing the purchase of a 16.7% stake in Monster Beverage for ~$2.2 billion. We’ll discuss the impact of this deal on Monster Beverage’s sales in the next part of this series. Monster Beverage constitutes over 1.4% of the Consumer Staples Select Sector SPDR Fund (XLP) and 0.1% of the iShares Core S&P 500 ETF (IVV).

Peers’ results in 2Q15

Coca-Cola and PepsiCo (PEP) continued to be affected by currency headwinds in 2Q15. Coca-Cola’s 2Q15 revenue declined by 3.3% to $12.2 billion. PepsiCo’s revenue in 2Q15 fell by 5.7% to $15.9 billion. Sales of Dr Pepper Snapple (DPS) increased by 1.5%, driven by a favorable product, package, and segment mix and a 1% rise in sales volumes.


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