uploads///MNST Sales

Can Monster Beverage Sustain Strong Sales Growth in 2019?

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Dec. 27 2018, Updated 12:40 p.m. ET

Strong sales growth

Monster Beverage (MNST) outperformed its larger peers in terms of sales growth in the first three quarters of 2018. The company’s sales rose 12.7% in the first nine months of 2018 to ~$2.9 billion.

In comparison, the Coca-Cola Company’s (KO) revenue fell 11.1% to $24.8 billion in the first nine months of 2018 due to its refranchising of its bottling operations. PepsiCo’s (PEP) revenue rose 2.6% to $45.1 billion in the first three quarters of 2018 driven by the performance of its Frito-Lay North America division and its performances in developing and emerging markets.

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Quarterly growth rates

Continued demand for Monster Beverage’s energy drink brands in domestic and international markets drove its double-digit top line growth in each of the first three quarters of 2018. The company’s sales grew 14.7%, 12.0%, and 11.7%, respectively, in the first, second, and third quarters.

Monster Beverage’s Monster Energy Drinks segment was the key driver of its sales growth in the first three quarters of 2018. Sales of the company’s Strategic Brands segment fell in the first three quarters due to its adoption of an accounting standard associated with the commissions it paid to Coca-Cola based on its sales to Coca-Cola-related parties.

Analysts’ expectations

For the fourth quarter, analysts expect Monster Beverage’s sales to rise 10.6% to $896.3 million. Analysts expect Monster Beverage’s sales for 2018 to rise 12.2% to $3.8 billion. Currently, analysts expect Monster Beverage’s sales growth rate to slow to 9.6% in 2019.

Monster Beverage sees further growth opportunities in international markets. Its net sales from international markets rose 17.2% to $818.8 million in the first nine months of 2018. However, the competition in the beverage space is increasing due to the rapid rise of the demand for healthier options, such as functional beverages.

We’ll focus on the company’s profitability in the next article.

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