Energy drinks firm Monster Beverage achieved record sales of £ 1.37 billion ($1.66bn) in its second quarter, 13.2 percent higher than the same period last year, stated reports recently.
Sales in the company’s core Monster Energy Drinks division, which primarily includes the Monster, Reign Total Body Fuel, and True North energy drinks, increased 12.5 percent to £1.27 ($1.54bn).
Meanwhile, sales for the company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from Coca-Cola, as well as its affordable energy brands, decreased 9.0 percent to $79.1m.
Monster highlighted that the sales outside the US jumped 18.8 percent, amounting to approximately 39 percent of total net sales in the second quarter, compared with 37 percent last year.
The company noted that it had experienced a “significant increase” in cost of sales, resulting in gross profit margin falling from 57.2 percent to 47.1 percent.
Increased freight rates and fuel costs, including costs relating to the importation of aluminium cans, increased ingredient and other input costs, including secondary packaging materials and increased co-packing fees, increased aluminium were pointed out as the reasons of increased cost. The decrease in gross profit was partially offset by price rises.
Vice Chairman and Co-Chief Executive Officer Hilton H. Schlosberg said: “We are pleased to report continued strong revenue growth, driven by consumer demand. Ensuring product availability for our customers and consumers remains a priority.
“Significant increases in freight-in and fuel costs, including costs relating to the importation of aluminium cans, as well as other input costs continue to impact costs of sales. We believe that some of the increased costs that we are experiencing are likely to be transitory, as we begin to decrease our reliance on the use of imported aluminium cans, as well as increase our inventory levels in closer proximity to our customers," he added.
