-- Monster Beverage (MNST) shares rose early Friday as the company reported first-quarter results above market estimates amid strong growth in the energy drinks category.
Adjusted earnings came in at $0.58 a share for the March quarter, up from $0.47 a year earlier, the energy drinks firm said late Thursday, while the consensus on FactSet was for $0.53. Sales climbed 27% to $2.35 billion amid a foreign-exchange tailwind of $89.3 million, topping the Street's view for $2.16 billion.
"We're pleased to report another quarter of strong financial results and cash generation," Chief Executive Hilton Schlosberg said during an earnings call, according to a FactSet transcript. "The global energy drink category remains healthy with continued robust growth."
The stock increased 5.4% in the most recent premarket activity.
Sales in the Monster energy drink segment advanced 28% to $2.19 billion, while the strategic brands division grew 29% to $126.7 million. Revenue in alcohol brands decreased 5.9% to $32.7 million. Sales to customers outside the US, which accounted for roughly 45% of total revenue, jumped by the same percentage to $1.06 billion. Sales in the US and Canada inclined by 16% year over year, according to Schlosberg.
Gross profit as a percentage of sales declined to 55% from 56.5% last year due to geographical sales mix, increased aluminum can costs and higher freight-in expenses, partially offset by pricing actions, the company said.
Tariffs and the increase in aluminum prices had a "modest" impact on Monster Beverage's results in the first quarter, Schlosberg said on the call. "Despite the modest impact on our business in the first quarter, the tariff landscape continues to be complicated and dynamic," the CEO noted.
In February, the US Supreme Court invalidated President Donald Trump's reciprocal tariffs imposed in 2025 under the International Emergency Economic Powers Act. Following that decision, Trump announced a 10% global tariff, which he later said would rise to 15%.
On Thursday, a US trade court ruled that Trump's 10% global tariffs are not justified under a 1970s trade law, Reuters reported.
"We do not believe, based on our business model, that the current tariffs will have a material impact on the company's operating results," Schlosberg told analysts. "However, based on current aluminum pricing and the Midwest premium, we expect a continued modest sequential increase in our costs through at least the end of 2026."