Monster Beverage Corporation

is on the call, as is Tom Kelly, our Chief Financial Officer. Tom Kelly will now read our cautionary statement.

Before we begin, I would like to remind listeners that certain statements made during this call may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. and are based on currently available information regarding the expectations of management with respect to revenues, profitability, future business, future events, financial performance, and trends. Management cautions that these statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside the control of the company that may cause actual results to differ materially from the forward-looking statements made during this call. Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, filed on February 28, 2025, including the sections contained therein, entitled Risk Factors and Forward-Looking Statements for Discussion on Specific Risks and Uncertainties that May Affect Our Performance. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. I would also like to note that an explanation of the non-GAAP measures, which may be mentioned during the course of this call, is provided in the notes and the condensed consolidated statements of income and other information attached to the earnings release dated May 8, 2025. A copy of this information is also available on our website, www.monsterbevcorp.com, in the financial information section. I would now like to hand the call over to Rodney Sachs.

Thanks, Tom. Trends in our Nielsen measured categories have been accelerating since early 2025. Consumer purchases in our non-Nielsen measured categories are following the same trend. growth opportunities in household penetration and per capita consumption, along with consumers' growing need for energy, are positive trends for the category. In the United States, the energy category, according to Nielsen, for the recently reported 13 weeks through April 26, 2025, grew at 10% versus the same period last year. In EMEA, the energy drink category, according to Nielsen, for our track markets for the recently reported 13-week period, which differs from country to country, grew at approximately 13.7% versus the same period last year on an FX-neutral basis. In APAC, the energy drink category, according to Nielsen and Intage, for the recently reported 13-week period, which differ from country to country, grew at approximately 13.6% versus the same period last year, also on an FX-neutral basis. In Latam, the energy drink category, according to Nielsen, for our tracked markets for the recently reported 13-week period, which differs from country to country, grew at approximately 15.7% versus the same period last year, FX neutral. This does not include Argentina and Chile. Net sales for the 2025 first quarter were negatively impacted by bottler distributor ordering patterns, specifically in the United States and EMEA. Adverse changes in foreign currency exchange rates decreased sales in the alcohol brand segment, adverse weather, one less selling day in the 2025 first quarter, as well as uncertain economic conditions. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the 2025 first quarter of $57.3 million. On a foreign currency adjusted basis, net sales for the 2025 first quarter increased 0.7% or 1.9% excluding the alcohol segment. Reported net sales were $1.85 billion in the 2025 first quarter or 2.3% lower than net sales of $1.9 billion in the comparable 2024 first quarter. Gross profit as a percentage of net sales for the 2025 first quarter was 56.5% compared with 54.1% in the 2024 first quarter. The increase in gross profit as a percentage of net sales for the 2025 first quarter was primarily the result of pricing actions as well as supply chain optimization in the quarter. Operating expenses for the 2025 first quarter were $478.2 million compared with $485.1 million in the 2024 first quarter. As a percentage of net sales, operating expenses for the 2025 first quarter were 25.8% compared with 25.5% in the 2024 first quarter. Distribution and warehouse expenses for the 2025 first quarter were 77.6 million or 4.2% of net sales compared to 94.4 million or 5% of net sales in the 2024 first quarter. Operating income for the 2025 first quarter increased 5.1% to $569.7 million from $542 million in the 2024 comparative quarter. Operating income for the 2025 first quarter, exclusive of the alcohol brand segment, increased 7.9% to $591.2 million from $548 million in the 2024 first quarter. The effective tax rate for the 2025 first quarter was 23.4% compared with 23.5% in the 2024 first quarter. Net income in the 2025 first quarter was $443 million as compared to $442 million in the 2024 comparable quarter. Diluted earnings per share for the 2025 first quarter increased 7.4% to 45 cents from 42 cents in the first quarter of 2024. Diluted earnings per share for the 2025 first quarter, exclusive of the alcohol brand segment, increased 10.2% to 47 cents from 42 cents in the first quarter of 2024. During the first quarter of 2025, the impact of tariffs on our operating results was immaterial. In general, while our concentrates are manufactured both in the US and Ireland at the present time, Production of our finished products takes place locally in our respective markets. The tariff landscape is complicated and dynamic. We import some raw materials into the United States, export certain raw materials for local markets, and export limited quantities of finished products. We do not believe, based on our business model, that the current tariffs will have a material impact on the company's operating results. We will recognize tariffs on aluminum, through the higher Midwest premium and are reviewing mitigation strategies across the business. For instance, AAF, our flavor and concentrate subsidiary, is planning to establish a facility in Brazil, which should be operational later in 2026. According to the Nielsen reports, for the 13 weeks ended April 26, 2025, for all outlets combined, excluding convenience and gas, Sales in dollars in the energy drink category, including energy shots, increased by 13.8% versus the same period a year ago. According to the Nielsen reports, for the 13 weeks ended April 26, 2025, for all outlets combined, namely convenience, grocery, drug, mass merchandisers, sales in dollars in the energy drink category, including energy shots, increased by 10% versus the same period a year ago. Sales of the company's energy drink brands, including banks, were up 6.9% in the 13-week period. Sales of Monster increased 8.7%. Sales of Rain were down 9.9%. Sales of Noz increased 0.8% and sales of Full Throttle decreased 1.5%. Sales of Red Bull increased 15.6%. According to Nielsen, for the four weeks ended April 26, 2025, sales in dollars in the energy drink category in the convenience and gas channel including energy shops, increased 8.9% over the same period the previous year. Sales of the company's energy drink brands, including Bang, were up 6.8% in the latest four-week period in the convenience and gas channel. Sales of Monster increased by 8.2% over the same period versus the previous year. Rain's sales decreased 6%, Nas was up 1.9%, and Full Throttle was down 1.7%. Sales of Red Bull were up 15.2%. According to Nielsen, for the four weeks ended April 26, 2025, the company's market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, decreased from 37.1% to 36.4%, including bang. Monster's share decreased from 29.2% to 29%. Rain's share decreased 0.4 of a share point to 2.6%. Nasdaq share decreased 0.1 of a share point to 2.5%, and full throttle share decreased from 0.7% to 0.6%. Bangs share was 1.7%. Red Bull share increased two share points to 36.8. Market share of certain competitors were as follows. Celsius, 7.8%. C4, 3.5%. Ghost, 2.9%. Five Hour, 2.8%. Alani New, 2.7%, and Rockstar, 2.4%. According to Nielsen, for the four weeks ended April 26, 2025, sales in dollars of the coffee plus energy drink category, which includes our Java Monster and Killer Brew lines in the convenience and gas channel, decreased 1.2% over the same period the previous year. Sales of Java Monster, including Killer Brew, were 4.4% higher in the same period versus the previous year. Sales of Starbucks Energy Coffee were 11.7% lower. Monster Coffee's share of the coffee plus energy drink category for the four weeks ended April 26, 2025, was 62.1%, up 3.4 points, while Starbucks Energy Coffee's share was 36.6%, down 4.4 points. According to Nielsen, in all measured channels in Canada, for the 12 weeks ended March 22, 2025, The energy drink category increased 9.4% in dollars. Sales of the company's energy drink brands increased 11.4% versus a year ago. The market share of the company's energy drink brands increased 0.7 of a point to 40.9%. Monster sales increased 8.5%, and its market share decreased 0.3 of a share point to 36.1%. Nozzer sales increased 12.4%, and its market share increased 0.1 of a point to to 1.2%. Full throttle sales increased 6.2% and its market share remained at 0.5 of 8%. According to Nielsen, for all outlets combined in Mexico, the energy drink category increased 9% for the month of March 2025. Monster sales increased 15.3%. Monster's market share in value increased 1.7 points to 31.3% against the comparable period the previous year. Sales of Predator increased 22.2%, and its market share increased 0.7 of a share point to 6.4%. The Nielsen statistics for Mexico cover single months, which is a short period that may often be materially influenced positively and or negatively by sales in the OXO convenience chain, which dominates the market. Sales in the OXO convenience chain, in turn, can be materially influenced by promotions that may be undertaken in that chain, by one or more energy drink brands during a particular month. Consequently, such activities could have a significant impact on the monthly Nielsen statistics for Mexico. According to Nielsen, for all outlets combined in Brazil, the energy drink category increased 33.7% for the month of March 2025. Monster's sales increased 26.5%. Monster's market share in value decreased 2.6 points to 45.2%, compared to March 2024. According to Nielsen, for all outlets combined in Chile, the energy drink category increased 1.6% for the month of March 2025. Monster sales decreased 3.5%. Monster's market share in value decreased 2.2 points to 40.7%, compared to March 2024. According to Nielsen, for all outlets combined in Argentina, in March 2025, Monster's market share in value decreased decreased 6.5 points to 52% compared to March 2024. We are the market share leader in Brazil, Chile, and Argentina. I would like to point out that the Nielsen numbers in EMEA should only be used as a guide because the channels read by Nielsen in EMEA vary from country to country and are reported on varying dates within the month referred to from country to country. According to Nielsen, in the 13-week period ending March 30, 2025, Monster's retail market share in value, as compared to the same period the previous year, grew from 16.2% to 18% in Belgium, from 22.6% to 24.4% in the Czech Republic, from 26.9% to 27.7% in Denmark, from 32.1% to 33.2% in Great Britain, from 15.8% to 18.1% in Germany, from 6.6% to 11.1% in the Netherlands, from 32.8% to 36.9% in Norway, from 18.6% to 21.3% in Poland, and from 30.2% to 33.4% in the Republic of Ireland. According to Nielsen, in the 13-week period ending March 30, 2025, Monster's retail market share in value as compared to the same period the previous quarter, remained flat at 40.7% in Spain and 14.7% in Sweden. According to Nielsen, in the 13-week period ending March 30, 2025, Monster's retail market share in value, as compared to the same period from the previous year, declined from 32.2% to 27.4% in France and from 19.9% to 18.2% in South Africa. According to Nielsen, in the 13-week period ending February 28, 2025, Monster's retail market share in value, as compared to the same period the previous year, grew from 34.9% to 35.9% in Greece and from 30.3% to 31.1% in Italy. According to Nielsen, in the 13-week period ending February 28, 2025, the retail market share in value of Predator increased also branded fury in certain markets, as compared to the same period the previous year, grew from 9.8% to 11.9% in Egypt, from 34.3% to 42.1% in Kenya, and from 20.8% to 23.9% in Nigeria. We are pleased that in the 2025 first quarter, monster gain markets here in Belgium, the Czech Republic, Denmark, Great Britain, Germany, Greece, Italy, the Netherlands, Norway, Poland, and the Republic of Ireland. According to CERCANA, for all outlets combined in Australia, the energy drink category increased 8.1% for the four weeks ending April 20, 2025. Monster's sales increased 22.2%. Monster's market share in value increased 2.8 points to 24.7% against the comparable period the previous year. Sales of Mother decreased 11.2% and its market share decreased two share points to 9.2%. According to Nielsen, for all outlets combined in New Zealand, the energy drink category increased 17.1% for the four weeks ending April 27, 2025. Monster's sales increased 23.9%. Monster's market share in value increased 0.8 of a share point to 15.5% against the comparable period the previous year. Sales of Mother decreased 9.3%, and its market share decreased 1.6 share points to 5.3%. Sales of Live Plus decreased 4.5%, and its market share decreased 1 share point to 4.4%. According to Intage in the Convenience Channel in Japan, the energy drink category increased 6.6% for the month of March 2025. Monsters sales increased 0.6% of 8%. Monster's market share in value decreased 3.4 points to 56.1% against the comparable period the previous year. According to Nielsen, for all outlets combined in South Korea, the energy drink category increased 18.3% for the month of March 2025. Monster's sales increased 24.8%. Monster's market share in value increased 2.8 points to 54.7% against the comparable period the previous year. Monster remains the market leader in Japan and South Korea. We again point out that certain market statistics that cover single months or four-week periods may often be materially influenced positively and or negatively by promotions or other trading factors during those periods. Net sales to customers outside the United States on a foreign currency adjusted basis increased 6.2% to $790.5 million in the 2025 first quarter. reported net sales to customers outside the U.S. were 733.2 million, 35.9% of total net sales in the 2025 first quarter, compared to 744.1 million, or 39.2% of total net sales in the corresponding quarter in 2024. Foreign currency exchange rates had a negative impact on net sales in U.S. dollars by approximately 57.3 million in the 2025 first quarter. In EMEA, net sales for the 2025 first quarter decreased by 2.6% in dollars, but increased 2.1% on a currency-neutral basis over the same period in 2024. Gross profit in this region as a percentage of net sales for the 2025 first quarter was 35.1% versus 34% in the same period in 2024. In Asia-Pacific, net sales in the 2025 first quarter decreased increased 10.4% in dollars and increased 16% on a currency neutral basis over the same period in 2024. Gross profit in this region as a percentage of net sales for the 2025 first quarter was 42.4% versus 42.6% in the same period in 2024. Net sales in Japan in the 2025 first quarter decreased 3.5% in dollars but increased 1.3% on a currency neutral basis. In South Korea, net sales in the 2020 first quarter decreased 2.5% in dollars and increased 6.8% on a currency-neutral basis as compared to the same quarter in 2024. In China, net sales in the 2025 first quarter increased 40.1% in dollars and increased 43.2% on a currency-neutral basis as compared to the same quarter in 2024. We remain optimistic about the long-term prospects for the monster brand in China and are excited about Predator, which is being rolled out to additional markets in China. In Oceania, which includes Australia, New Zealand, Tahiti, French Polynesia, New Caledonia, Papua New Guinea and Guam, net sales increased 21.6% in dollars and increased 28.8% on a currency-neutral basis. In Latin America... including Mexico and the Caribbean, net sales in the 2025 first quarter decreased 3.1% in dollars, but increased 14.4% on a currency neutral basis over the same period in 2024. Gross profit in this region as a percentage of net sales was 44.6% for the 2025 first quarter versus 42.8% in the 2024 first quarter. In Brazil, net sales in the 2025 first quarter decreased 5.3% in dollars and increased 13.4% on a currency neutral basis. Net sales in Mexico decreased 4.7% in dollars and increased 14.1% on a currency neutral basis in the 2025 first quarter. Net sales in Chile decreased 24.2% in dollars and decreased 18.5% on a currency neutral basis in the 2025 first quarter. Net sales in Argentina increased 20.7% in dollars and increased 65.7% on a currency neutral basis in the 2025 first quarter. Monster Brewing continued to face challenges in the first quarter. We remain focused on optimizing our personnel and facilities to support the current demand for our Monster Brewing portfolio and innovation pipeline. Net sales for the alcohol brand segment were $34.7 million in the 2025 first quarter, a decrease of approximately $21.4 million or 38.1% lower than the 2024 comparable quarter, largely as a result of the launch of Nasty Beast hard tea in the first quarter of 2024. As planned, Michi, our newest flavoured beer innovation, is being shipped to distributors and retailers and is in the process of a national launch in two 24-ounce flavours, Michi Lime Chilada and Michi Tomato Michelada. We are planning to launch the beast in certain international markets subject to regulatory approvals. We are planning for further innovation in monster brewing in the coming months. In the United States, in January, we launched Rainstorm Tropical, Bang Sour Ropes, and Monster Ultra Blue Hawaiian at retail. In February, we launched Juice Monster Viking Berry, Killer Brew Mean Bean, Killer Brew Loka Moka, and Rain Total Body Fuel White Haze. In March, we launched Bang Any Means Orange. In Canada, during the first quarter of 2025, we launched Monster Energy Ultra Fantasy Ruby Red, Monster Rio Punch, Monster Java Irish Cream, Rain Total Body Fuel Sour Gummy Worm, Monster Reserve Peaches and Cream, Monster Rehab Green Tea, Rainstorm Guava Strawberry and Citrus Zest, and Bang Cotton Candy. In Latin America, during the first quarter of 2025, we launched a series of innovations within the Altra family. In January, we launched Altra Pichiquin in Chile. This was followed in March by the launch of Altra Fiesta in Brazil. In Puerto Rico, we launched Rain Tropical Storm, Rain Sour Gummy, and Java Cafe Latte. Lastly, we launched Pipeline Punch in Peru. In EMEA, in the first quarter of 2025, we launched Monster Green Altra Shopping, Sugar, Juiced Bad Apple, Juiced Rio Punch, Ultra Fantasy Ruby Red, Ultra Peach Akeen, Ultra Strawberry Dreams, Burn Guava, and Burn Orange Fire in certain countries in EMEA. Additional launches are planned throughout EMEA in 2025 of various products in different countries. In Australia, during the month of March, we launched Monster Ultra Fantasy Ruby Red. During the first quarter of 2025, We launched Monster Ultra Fantasy Ruby Red in Japan, Monster Ultra Strawberry Dreams in South Korea, Monster Aussie Lemonade in Hong Kong and Taiwan, and Monster Pipeline Punch in Vietnam. Additionally, we remain optimistic about the long-term prospects for the Monster brand in China and India and are excited about the incremental expansion of the Predator brand in these two countries. Notably, in China, we implemented the national rollout of Predator brand in all provinces. During the 2025 first quarter, no shares of the company's common stock were repurchased. As of May 8, approximately $500 million remained available for repurchase under the previously authorized repurchase program. We estimate that on a foreign currency adjusted basis, April 2025 sales were approximately 16.7% higher than the comparable April 2024 sales and 17.6% higher than on a foreign currency adjusted basis excluding the alcohol brand segment. We estimate that April 2025 sales on a non-foreign currency adjusted basis were approximately 15.3% higher than the comparable April 2022 sales and 16.1% higher on a non-foreign currency adjusted basis excluding the alcohol brand segment. April 2025 had the same number of selling days as April 2024. We estimate that year-to-date sales through April 30, 2025, on a foreign currency-adjusted basis, excluding the alcohol brands, were approximately 6.9% higher than the comparable period in 2024 and 5.8% higher on a foreign currency-adjusted basis, including the alcohol brand segment. We estimate that year-to-date sales through April 30, 2025, on a non-foreign currency adjusted basis were approximately 3.3% higher than the comparable period in 2024 and 4.3% higher on a non-foreign currency adjusted basis, excluding the alcohol brand segment. In this regard, we caution again that sales over a short period are often disproportionately impacted by various factors, such as, for example, selling days, days of the week in which holidays fall, timing of new product launches, the timing of price increases, the promotions in retail stores, distributor incentives, as well as shifts in the timing of production. In some instances, our bottlers are responsible for production and determine their own production schedules. This affects the dates on which we invoice such bottlers. Furthermore, our bottling and distribution partners maintain inventory levels according to their own internal requirements, which they may alter from time to time for their own business reasons. We reiterate that sales over a short period, such as a single month, should not necessarily be imputed to or regarded as indicative of results for a full quarter or any future period. In conclusion, I'd like to summarize some recent positive points. The energy category continues to grow globally. We believe that household penetration continues to increase in the energy drink category. Growth opportunities in household penetration for capital consumption, along with consumers' need for energy, are positive factors for the category. We continue to expand ourselves in non-Nielsen measure channels. Globally, as measured by our scanner track data, consumer demand remains strong. In the United States, the energy category, as measured by Nielsen, accelerated through the quarter and remained strong in April. Similarly, monster sales at retail, as measured by Nielsen, accelerated through the quarter and remained strong in April. We continue to review opportunities for price increases domestically and internationally. Our AFF flavor facility in Ireland is now providing a large number of flavors to our EMEA region, enabling better service levels and lower landed costs to our EMEA region. The juice plant at our AFF facility in Ireland has now been completed. After trials, we expect the juice plant to be in production by mid-year. We're excited for our 2025 innovation pipeline globally. We are currently exploring opportunities for our alcohol products in certain international jurisdictions. We are pleased with the rollout of Predator and Fury, our affordable energy drink portfolio, in a number of markets internationally. We are proceeding with plans for further launches of our affordable energy brands. I would now like to open the floor to questions about the quarter. Thank you.