Monster Beverage falls after soaring costs lead to EPS miss
Justin Sullivan

Monster Beverage Corporation (NASDAQ:MNST) reported sales rose 13.2% in Q2 to a record tally of $1.66B. Case sales rose 14% in Q2, while average net sales per case dropped to to $8.78 from $9.01.
Gross margin plunged to 47.1% of sales vs. 57.2% a year ago. Margins were whacked due to an increase in cost of sales primarily from increased freight rates and fuel costs, increased ingredient and other input costs, increased aluminum can costs attributable to higher aluminum commodity pricing, geographical and product sales mix, and production inefficiencies. MNST also experienced significant increases in distribution expenses including increased fuel, freight and warehousing costs, which adversely impacted operating costs.
Operating income came in at $373.0M vs. $526M a year ago.
CEO update: "We have implemented measures to mitigate the impact of increased costs experienced in our supply chain through reductions in promotions and other pricing actions in the United States and in EMEA. In the United States, we are implementing a market-wide increase in pricing, effective September 1, 2022."
No guidance was issued by Monster.
MNST dropped 4.78% AH to $91.75.
The Seeking Alpha Quant Rating on MNST is at Hold with low grades for valuation and EPS revisions pulling down the score.