Monster Beverage Corporation (NASDAQ: MNST) has posted a mixed third quarter of 2017 performance on concerns over their gross margin. The gross profit, as a percentage of net sales, for the 2017 third quarter, has decreased to 62.6 percent from 63.8 percent for the comparable 2016 third quarter, due to the geographical and product sales mix, as well as to increases in other costs. The operating expenses grew to $252.3 million, compared with $212.6 million in the third quarter 2016. Hence the stock lost over 5.2% in the after-hours session on November 8th, 2017.
The group in the third quarter has reported the net income growth by 14.1 percent to $218.7 million from $191.6 million in the same period last year. Monster Beverage Corporation has reported the adjusted earnings per share of $0.40 in the third quarter of FY 17, while adjusted revenue rose 15.4 percent to $909.5 million in the third quarter of FY 17.
Moreover, net sales for the Company’s Monster Energy Drinks segment has increased 16.6 percent to $827.7 million for the 2017 third quarter, from $710.1 million for the same period last year. The net sales for the Company’s Strategic Brands segment, that includes the various energy drink brands acquired from The Coca-Cola Company, grew 6.2 percent to $76.6 million for the 2017 third quarter, from $72.1 million in the comparable 2016 quarter. The net sales for the Company’s Other segment, that includes certain products of American Fruits & Flavors sold to independent third parties, were $5.2 million for the 2017 third quarter, compared with $5.7 million in the 2016 third quarter.
Additionally, Monster Beverage Corporation’s strategic alignment of the distribution system with Coca-Cola system bottlers is progressing well. During the third quarter, the company has successfully transitioned Nicaragua and Vietnam to Coca-Cola bottlers and has commenced distribution of Monster Energy in Georgia, Kuwait and Taiwan. In October 2017, Monster Beverage Corporation has launched or transitioned the Monster Energy brand in a number of smaller countries and the company is currently planning for further launches or transitions in other countries. MNST is also planning a relaunch in India. Further, the company is in the process of launching Espresso Monster in 8.4 oz. cans in two flavors, as well as NOS Nitro Mango in 16 oz. cans, in the United States. There are further new product launches planned for 2018.
Monster Beverage Corporation stock has risen 30% in this year to date (source: Google Finance).