USA – Monster Beverages, an American beverage company that manufactures energy drinks, has reported a net sales increase of 12% to exceed US$1 billion threshold in its quarterly sales results.
According to the company, the net sales for the 2018 second quarter increased 12% to US$1.02 billion from US$907.1 million in the same period last year.
The gross sales for the 2018 second quarter increased 14.7% to US$1.19 billion from US$1.04 billion in the same period last year.
The company said that the net sales for the 2018 second quarter were negatively impacted by US$12.2 million, due to the adoption of Accounting Standards Codification (ASC) 606.
Under ASC 606, commissions paid to The Coca-Cola Company (TCCC), based on sales to certain of the Company’s customers which TCCC accounts for under the equity method (the TCCC Related Parties), or consolidates, are included as a reduction to net sales.
Prior to January 1, 2018, commissions based on sales to the TCCC Related Parties were included in operating expenses.
Net changes in foreign currency exchange rates had a favorable impact on net and gross sales for the 2018 second quarter of US$16.8 million and US$21.4 million, respectively.
Net sales for the Company’s Monster Energy Drinks segment, which includes the Company’s Monster Energy drinks and Mutant Super Soda drinks, increased 14% to US$929.4 million for the 2018 second quarter, from US$815.3 million for the same period last year.
Net sales for the Company’s Strategic Brands segment, which includes the various energy drink brands acquired from TCCC, decreased 6.85% to US$79.8 million for the 2018 second quarter, from US$85.6 million in the comparable 2017 quarter.
Net sales for the Company’s Strategic Brands segment for the 2018 second quarter were negatively impacted by US$7.1 million, due to the adoption of ASC 606.
Net sales for the Company’s Other segment, which includes certain products of American Fruits & Flavors sold to independent third parties, were US$6.6 million for the 2018 second quarter, compared with US$6.2 million in the 2017 second quarter.
Rodney C. Sacks, Chairman and Chief Executive Officer, said: “We are pleased to report record quarterly net sales of more than US$1.0 billion, a first in our Company’s history.
We continue to progress our strategic alignment with the Coca-Cola system bottlers.
We have reached agreements to transition Monster Energy to Coca-Cola bottlers in Arkansas.
In the second quarter of 2018, we transitioned parts of Arkansas and are planning on transitioning the remainder of Arkansas in the third quarter of 2018.”
Net sales to customers outside the United States increased 18.5% to US$293.8 million in the 2018 second quarter, from US$247.9 million in the corresponding quarter in 2017.
The effective tax rate for the 2018 second quarter was 24.6%, compared with 35.9% in the same period last year.
The decrease in the effective tax rate was primarily due to the Tax Cuts and Jobs Act signed into law on December 22, 2017.
Net income for the 2018 second quarter increased 21.3% to US$270.1 million from US$222.6 million in the comparable quarter last year.
Net income per diluted share for the 2018 second quarter increased 23.8 percent to US$0.48 from US$0.39 in the second quarter of 2017.
“In the second quarter of 2018, we successfully launched our Monster Energy® brand with the Coca-Cola bottlers in Belarus, Tanzania and Uruguay and commenced the relaunch of Monster Energy with a Coca-Cola bottler in select cities in India.
We launched Monster Energy in Ecuador in July 2018 and are planning further international launches later this year,” Sacks added.