Monster Beverage stock moves lower on earnings miss, margin pressure
Justin Sullivan

Monster Beverage Corp. (NASDAQ:MNST) stock slid sharply on Wednesday after the company missed on top and bottom lines for the fourth quarter.

The California-based beverage company reported $0.57 in earnings per share, $0.05 short of expectations. Meanwhile, $1.51B in revenue for the quarter came up narrowly short of expectations. Management said that gross profits fell 210 basis points from the prior year quarter due to increased ingredient and input costs, geographical and product sales mix, as well as increased logistical costs.

âWe are continuing to deplete the remaining higher cost imported can inventories in the United States and in EMEA, which should be fully utilized during 2023. We believe that some of the increased costs that we have experienced in 2022 are likely to be transitory, although cost inflation, including increases in energy particularly in EMEA, ingredient and other input costs, as well as co-packing fees, remain challenging,â Vice Chairman and Co-Chief Executive Officer Hilton H. Schlosberg said. âCertain price increases are being implemented on a phased approach during the first half of 2023, some in addition to price increases or pricing actions already taken in 2022.â

He told analysts on Tuesday evening that a 6% market-wide price hike in the United States went into effect as of September 1, 2022. A similar price hike will be implemented on the 24-ounce line effective April 1. Lower freight costs, supply chain normalization, and higher raw material inventories are also expected to offset costs into 2023.

Elsewhere, the company highlighted new product releases, including The Beast Unleashed flavored malt beverage alcohol in six states. A wider rollout is expected in 2023 as the company continues to leverage its CANarchy acquisition.

Shares of Monster Beverage (MNST) fell 4.2% in premarket trading on Wednesday.
Read the earnings call transcript.