Reign energy drinks drive strong Q3 at Monster Beverage

By Beth Newhart

- Last updated on GMT

Sales of Reign Total Body Fuel drove the quarter, which contain 300mg of caffeine and electrolytes, with no calories, sugar or artificial flavors.
Sales of Reign Total Body Fuel drove the quarter, which contain 300mg of caffeine and electrolytes, with no calories, sugar or artificial flavors.

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After the launch of Reign Total Body Fuel early in 2019, Monster Beverage has posted an 11.6% sales increase in the third quarter.

Monster Beverage netted $1.13bn in total global sales in its third quarter of 2019, an 11.6% increase from last year’s $1.02bn. The company said that net changes in foreign currency exchange rates had a negative impact on its net and gross sales this quarter of $12.2m and $15.1m, respectively.

The strong quarter was led by the company’s Monster Energy Drinks segment, which includes Monster Energy drinks and Reign Total Body Fuel. It increased by 13.5% to $1.06bn in Q3, up from $935.1m.

Monster Beverage’s Strategic Brands segment includes several energy drink brands acquired from The Coca-Cola Company and other affordable energy brands. It decreased by 10.9% to $66.3m, down from $74.4m.

The company’s remaining SKUs fall into its ‘Other’ segment, including products of American Fruits and Flavors that are sold to independent third parties. This smaller category posted $5.9m in sales for Q3, up from $6.6m.

For all markets outside the US, net sales increased 34.2% to $379.8m, up from $283m. These sales accounted for about 34% of the company’s total net sales in Q3, an increase from 28% last year.

Rodney C. Sacks, chairman and CEO, said “We are pleased to report record gross and net sales in the 2019 third quarter, driven by our Reign Total Body Fuel high performance energy drinks, which we launched in the first quarter, as well as growth in our Monster Energy brand energy drinks internationally.”

The company said that this quarter marked a transition of Monster Energy drinks to Coca-Cola bottlers in Latin American countries like the Dominican Republic, El Salvador and Honduras, with further country launches and transitions planned for Q4.

Reign Total Body Fuel contains 300mg of caffeine and electrolytes, with no calories, sugar or artificial flavors. It's positioned as a fitness-focused energy drink that supports 'performance needs.' In October it rolled out the newest flavor, Orange Dreamsicle. It joined Sour Apple, Mang-O-Matic, Carnival Candy, Melon Mania, Lemon Hdz, Strawberry Sublime, Peach Fizz and Razzle Berry.

In Q3 there were also new varieties of core Monster drinks in the US, like Monster Maxx Zero Sugar in Mango Matic and Rad Red. Reign launched in Sweden in Q3, and affordable energy brand, Predator, also launched in additional international markets this quarter.

Monster Beverage said its operating income for Q3 increased to $395.4m from $339.6m last year. The effective tax rate was 25%, up from 21.8% in 2018. The increase in the effective tax rate was mostly due to increased income taxes in certain foreign jurisdictions, as well as a decrease in the equity compensation deduction, Monster said.

The company purchased approximately 4.3m shares of its common stock this quarter, and the board then authorized a new $500m share repurchase program of the company’s outstanding common stock. It said the timing of the share repurchases will depend on a variety of factors, including market conditions.

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