Q1 2024 Monster Beverage Corp Earnings Call

Good day and welcome to the Monster beverage company first quarter 'twenty 'twenty four conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question.

Operator: Good day, and welcome to the Monster Beverage Company first quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star again. Please note this event is being recorded. I would like now to turn the conference over to CEOs Rodney Sacks and Hilton Schlosberg. Please go ahead.

Operator: To ask a question you May press Star then one on a touchtone phone.

Operator: Draw. Your question. Please press Star then two please note. This event is being recorded.

Operator: I'd like now to turn the conference over to Ceos, Rodney sacks, and Hilton Schlossberg. Please go ahead.

Rodney Cyril Sacks: Thank you good afternoon, ladies and gentlemen, thank you for attending the school I'm Rodney Sachs Hilton Schlossberg I'll Watch <unk> co Chief Executive Officer is on the call as he is Tom Kelly, Our Chief Financial Officer, Tom Kelly will now read our cautionary statement.

Rodney Cyril Sacks: Thank you. Good afternoon, ladies and gentlemen. Thank you for attending this call. I'm Rodney Sacks. Hilton Schlosberg, our Vice-Chief and Co-Chief Executive Officer, is on the call, as is Tom Kelly, our Chief Financial Officer. Tom Kelly will now read our cautionary statement.

Rodney Cyril Sacks: 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 27 a of.

Thomas J. Kelly: 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.

Thomas J. Kelly: The Securities Act of $19 33, as amended and section 21 E of the Securities Act.

Thomas J. Kelly: Exchange Act of $19 34 as amended.

Thomas J. Kelly: 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.

Thomas J. Kelly: 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.

Thomas J. Kelly: Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K filed on February 29, 2024, including the sections contained therein entitled risk factors and forward looking statements for a discussion on.

Thomas J. Kelly: Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, filed on February 29, 2024, 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 now like to hand the call over to Rodney Sacks.

Rodney Cyril Sacks: Risks and uncertainties that may affect our performance.

Rodney Cyril Sacks: The company assumes no obligations to update any forward looking statements, whether as a result of new information future events or otherwise.

Thomas J. Kelly: I would now like to hand, the call over to Rodney sacks.

Rodney Cyril Sacks: Thank you, Tom. The company achieved record first-quarter net sales of $1.9 billion in the 2024 first quarter, 11.8% higher than net sales of $1.7 billion in the 2023 comparable period and 15.6% higher on a foreign currency-adjusted basis, 12.6% higher exclusive of Argentina's impact. Growth profit as a percentage of net sales for the 2024 first quarter was 54.1% compared with 52.8% in the comparative 2023 first quarter. The increasing growth profit as a percentage of net sales for the 2024 first quarter as compared to the 2023 first quarter was primarily the result of decreased freight-in costs, pricing actions in certain markets, and lower import costs, partially offset by geographical sales. Operating expenses for the 2024 first quarter were $485.1 million, compared with $412.8 million in the 2023 first quarter.

Rodney Cyril Sacks: Thank you to them.

Rodney Cyril Sacks: The company achieved record first quarter net sales of $1 9 billion in the 'twenty to 'twenty four first quarter living point to 8% higher than net sales of $1 7 billion in the 'twenty two 'twenty three comparable period and $15, 6% higher on a foreign currency adjusted basis.

Rodney Cyril Sacks: 12% dropped 6% exclusive of Argentina's impact gross profit as a percentage of mid sales for the 2020 for first quarter was 54, 1% compared with 52.8% in the comparative 2023 first quarter the increase in gross profit as a percent.

Rodney Cyril Sacks: <unk> sales for the 'twenty 'twenty four first quarter as compared to the 2023 first quarter was primarily the result of decreased frightening cost pricing actions in certain markets and lower input costs, partially offset by geographical sales mix.

Rodney Cyril Sacks: As a percentage of net sales, operating expenses for the 2024 first quarter were 25.5% compared with 24.3% in the 2023 first quarter. The increase in operating expenses was primarily the result of increased storage and warehouse, increased marketing expenses, including sponsorship and endorsement, and social media expenses, as well as increased payroll expenses. Distribution expenses for the 2024 first quarter were $94.4 million, or 5% of net sales, compared to $76.3 million, or 4.5% of net sales, in the 2023 first quarter.

Rodney Cyril Sacks: Operating expenses for the 2020 full first quarter with $485 1 million compared with $412 8 million in the 2023 first quarter as a percentage of net sales operating expenses for the 2020 full first quarter with 25, 5% compared.

Rodney Cyril Sacks: With 24, 3% in the 'twenty to 'twenty three first quarter. The increase in operating expenses was primarily the result of increased storage and warehouse increased marketing expenses, including sponsorship and endorsement and social media expenses as well as increased payroll expenses distribution expense.

Rodney Cyril Sacks: For the 2024 first quarter with $94 4 million or 5% of net sales compared to $76 3 million or four 4% of net sales in the 2023 first quarter operating income for the 2020 for first quarter increased 11, 7% to $442 million.

Rodney Cyril Sacks: Operating income for the 2024 first quarter increased 11.7% to $542 million from $485.1 million in the 2023 comparative quarter. The effective tax rate for the 2024 first quarter was 23.5% compared to 20.1% in the 2023 first quarter. The increase in the effective tax rate was primarily attributable to a decrease in the stock-based compensation deduction in the 2024 first quarter as compared to the 2023 first quarter.

Rodney Cyril Sacks: $485 1 million in the 2023 comparative quarter, the effective tax rate for the 2020 for first quarter was 23, 5% compared with 21% in the 'twenty two 'twenty three first quarter. The increase in the effective tax rate was primarily attributable to a decrease in the stock.

Rodney Cyril Sacks: Based compensation deduction in the 2020 full first quarter as compared to 2023 first quarter net.

Rodney Cyril Sacks: Net income increased 11.2% to $442 million as compared to $397.4 million in the 2023 comparable quarter. Diluted earnings per share for the 2024 first quarter increased 12% to $0.42 from $0.38 in the first quarter of 2023. The company implemented price increases in the first quarter of 2024 in certain international markets, including highly inflationary markets. We are continuing to monitor opportunities for further pricing actions in both the United States and internationally.

Rodney Cyril Sacks: Net income increased 11, 2% to $442 million as compared to $397 4 million in the 2023 comparable quarter diluted earnings per share for the 2020 for first quarter increased 12% to 42 cents from 38 cents in the first quarter of 2023.

Rodney Cyril Sacks: The company implemented price increases in the first quarter of 2024 in certain international markets, including a highly inflationary markets. We are continuing to monitor opportunities for further pricing actions in both the United States and internationally.

Rodney Cyril Sacks: The company continues to have market share leadership in the energy drink category for all outlets combined in the United States for both the 13-week and 4-week periods ending April 20, 2024. According to the Nielsen report for the 13 weeks through April 20, 2024, for all outlets combined, namely convenience, grocery, drug, and mass merchandisers, sales in dollars in the energy drink category, including energy shots, increased by 3.8% versus the same period a year ago.

Rodney Cyril Sacks: Company continues to have market share leadership in the energy drink category for all outlets combined in the United States in both a 13 week and four week periods ended April 22024. According to the Nielsen reports for the 13 weeks through April 22024 for all outlets combined namely convenience grow.

Rodney Cyril Sacks: Sales of the company's energy brands, excluding Bang, were up 0.1% in the 13-week period. Sales of Monster declined 1.4%, sales of Rain were up 16.1%, sales of NAS increased 4.9%, and sales of Full Throttle increased 1.7%. Sales of Red Bull increased 3.6%. According to Nielsen, for the four weeks ended April 20, 2024, sales in dollars in the energy drink category in the convenience and gas channel, including energy shots, increased 1% over the same period the previous year.

Rodney Cyril Sacks: Sales of the company's energy brands, excluding Bang, decreased 2.1% in the 4-week period in the convenience and gas channel. Sales of Monster decreased by 3.3% over the same period versus the previous year. Rain sales increased 5.3%, NAS was up 4.5%, and Full Throttle was down 0.6%. Sales of Red Bull were up 2.1%.

Rodney Cyril Sacks: Suri drug mass merchandisers sales in dollars in the energy drink category, including energy shots increased by three 8% versus the same period, a year ago sales of the company's energy brands. Excluding bank were up <unk> one of a percent in the 13 week period sales of Monster declined one.

Rodney Cyril Sacks: 4% sales of reign were up 16, 1% sales of nausea increased four 9% and sells a full throttle increased one 7% sales of Red Bull increased three 6%. According to Nielsen for the four weeks ended April 22024 sales in dollars in the energy drink category in the.

Rodney Cyril Sacks: According to Nielsen, for the four weeks ended April 20, 2024, the company's market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, decreased from 36.8 percent to 35.7 percent, excluding Bang. Including Bang, the company's market share is 37.3 percent. Monster's share decreased from 30.6 percent a year ago to 29.3 percent. Benz's share increased 0.1 of a share point to 3.1 percent, Nasdaq's share increased 0.1 of a share point to 2.6 percent, and Full Throttle's share remained at 0.7 of a percent. Bang's share was 1.6 percent.

Rodney Cyril Sacks: Convenience and gas channel, including energy shots in dollars increased 1% over the same period the previous year sales of the company's energy brands, Excluding bank decreased two 1% in the four week period in the convenience and gas channel sales of monster decreased by three 3% over the same period versus the previous year.

Rodney Cyril Sacks: <unk> sales increased five 3% north was up four 5% and full throttle was down <unk> six of a percent sales of Red Bull were up two 1%.

Rodney Cyril Sacks: According to Nielsen for the four weeks ended April 22024, the company's market share of the energy drink category in the convenience and gas channel, including energy shots in dollars decreased from 36, 8% to 35, 7% excluding bank, including Bang the company's market share is 37.

Rodney Cyril Sacks: 3% month to share decreased from 36% a year ago to 29, 3% range share increased one of a share point to three 1% nausea share increased four one of a share point to two 6% and full throttle share remained at <unk> seven of a percent Bang share was one.

Rodney Cyril Sacks: 6% Red Bull share increased <unk> four of a share point to 34, 6% market share of certain competitors, whereas follows Celsius eight 5% C 43, 7% five of our three 3% Rockstar, 3% and goes 3%.

Rodney Cyril Sacks: Red Bull's share increased by 0.4 of a share point to 34.6 percent. Market share of certain competitors was as follows, Celsius 8.5 percent, C4 3.7 percent. According to Nielsen, for the four weeks ended April 20, 2024, sales in dollars in the coffee plus energy drink category, which includes our Java Monster line, in the convenience and gas channel decreased 10.7% over the same period the previous year. Sales of Java Monster, including Java Monster 300 and Java Monster Nitro Cold Brew, were 3.6% lower in the same period versus the previous year. Meanwhile, sales of Starbucks Energy were 19.5% lower.

Rodney Cyril Sacks: According to Nielsen for the four weeks ended April 22024 sales in dollars in the coffee plus energy drink category, which includes our Java Monster line in the convenience and gas channel decreased 10, 7% over the same period the previous year. So that was a Java monster, including Java Monster 300, and Java Monster in Entre.

Rodney Cyril Sacks: Java Monster's share of the coffee plus energy drink category for the four weeks ended April 20, 2024, was 59.5%, up 4.4 points, while Starbucks Energy's share was down 40.1%, down 4.4 points. According to Nielsen, in all measured channels in Canada, for the 12 weeks ended March 23, 2024, the energy drink category increased 10.2% in dollars. Sales of the company's energy drink brands increased 2.9% versus a year ago, but the market share of the company's energy drink brands decreased 2.8 points to 40.3%. Monster's sales increased 4.2%, and its market share decreased 2.1 points to 36.5%. Nod's sales decreased 6.9%, and its market share decreased 0.2 points to 1.1%.

Rodney Cyril Sacks: Cold brew with three 6% lower in the same period versus the previous year sales of Starbucks energy were 19, 5% lower Java months, the share of the coffee plus energy drink category for the four weeks ended April 22024 was 59, 5% up for <unk>.

Rodney Cyril Sacks: Four points, while Starbucks energy share was down 41% was down to 41% down four four points.

Rodney Cyril Sacks: According to Nielsen in all measured channels in Canada for the 12 weeks ended March 23, 2020 for the energy drink category increased 10, 2% in dollars sales of the company's energy drink brands increased two 9% versus a year ago. The market share of the company's energy drink brands decreased 2.8 points to 40.

Rodney Cyril Sacks: Eight 3% Monster sales increased four 2% and its market share decreased two one points to 36, 5% strategic portfolio, Northern South decreased six 9% and its market share decreased <unk> two points to one 1% full throttle sales increased 22, 2%.

Rodney Cyril Sacks: Full Throttle's sales increased 22.2%, and its market share remained at 0.5 of 8%. According to Nielsen, for all outlets combined in Mexico, the energy drink category increased 23.1% for the month of March 2024. Monster's sales increased 20.2%. However, its market share in value decreased 0.7% to 29.3% against the comparable period the previous year. Sales of Predator increased 28.6%, and its market share increased 0.2 share points to 5.9%. The Nielsen statistics for Mexico cover a single month, 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.

Rodney Cyril Sacks: <unk> and its market share remained at 0.5 of 8%.

Rodney Cyril Sacks: According to Nielsen for all outlets combined in Mexico, the energy drink category increased 23, 1% for the month of March 'twenty 'twenty four monster sales increased 22% monsters market share in value decreased <unk> seven of a point to 29, 3% against the comparable period.

Rodney Cyril Sacks: Previous year sells a predator increased 28, 6% and its market share increased <unk> two share points to five 9%.

Rodney Cyril Sacks: The Nielsen statistics for Mexico cover single months, which is a short period that may often be materially influenced positively <unk> negatively by ourselves in the OXXO convenience chain, which dominates the market.

Rodney Cyril Sacks: 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, Corey J. Nielsen, for all outlets combined.

Rodney Cyril Sacks: In the OXXO 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.

Rodney Cyril Sacks: According to Nielsen.

Rodney Cyril Sacks: All outlets combined in Brazil, the energy drink category increased 15, 7% for the month of March 2024 months' themselves increased 26, 7% monsters market share in value increased four two points to 48, 1% compared to March 2023.

Rodney Cyril Sacks: In Brazil, the energy drink category increased 15.7% for the month of March, 2024, and Monster sales increased 26.7%. Monster's market share value increased 4.2 points to 48.1% compared to March, 2023. In Argentina, due in part to the impact of inflation-related local currency price increases, the energy drink category increased 265.9% for the month of March, 2024.

Rodney Cyril Sacks: Tina due in part to the impact of inflation related local currency price increases the energy drink category increased 265, 9% for the month of March 2020 for Monster sales increased 302%.

Rodney Cyril Sacks: <unk> market share in value increased five points to 58, 5% compared to March 2023 in Chile, the energy drink category decreased eight 4% for the month of March 2020 for Monster sales decreased 7.8% monsters market share in value increased <unk> three.

Rodney Cyril Sacks: Monster sales increased 300.2%. Monster's market share in value increased 5 points to 58.5% compared to March 2023. In Chile, the energy drink category decreased 8.4% for the month of March 2024.

Rodney Cyril Sacks: Monster's sales decreased 7.8%, but its market share in value increased 0.3 of a point to 42.9%. Monster Energy remains the leading energy brand in value in Argentina, Brazil, and Chile. 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.

Rodney Cyril Sacks: <unk> of a point to 42, 9% monthly energy remains the leading energy brand in value in Argentina, Brazil, and Chile would.

Rodney Cyril Sacks: 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 until the end of March 'twenty 'twenty, four monsters retail market share in value.

Rodney Cyril Sacks: According to Nielsen, in the 13-week period until the end of March 2024, Monster's retail market share value, as compared to the same period the previous year, grew from 15.5% to 16.2% in Belgium, from 32.8% to 34.2% in France, from 30.8% to 33.1% in Great Britain, from 4.7% to 6.6% in the Netherlands, from 28.3% to 30.3% in the Republic of Ireland, and from 39.9% According to Nielsen, in the 13-week period until the end of March 2024, Monster's retail market share value, compared to the same period the previous year, declined from 34.6% to 32.8% in Norway, from 19.5% to 19% in South Africa, and from 17.9% to 14.7% in Sweden.

Rodney Cyril Sacks: According to Nielsen, in the 13-week period until the end of February 2024, Monster's retail market share value, as compared to the same period the previous year, grew from 20.4 percent to 22.6 percent in the Czech Republic, from 29.3 percent to 29.9 percent in Italy, and from 15.9 percent to 17.2 percent in Germany. According to Nielsen, in the 13-week period until the end of February 2024, Monster's retail market share value, as compared to the same period the previous year, remained flat at 18.9% in Poland.

Rodney Cyril Sacks: As compared to the same period the previous year grew from 15, 5% to 16, 2% in Belgium from 32, 8% to 34, 2% in France from.

Rodney Cyril Sacks: City point to 8% to 73, 1% in Great Britain from four 7% to six 6% in the Netherlands from $28 three to 33, and the Republic of Ireland and from 39, 9% to 41 three in spine.

Rodney Cyril Sacks: According to Nielsen in the 13 week period until the end of March 2024, monsters retail market share in value as compared to the same period the previous year.

Rodney Cyril Sacks: <unk> from 34, 6% to 32, 8% in Norway from 19, 5% to 19% in South Africa, and from 17, 9% to 14, 7% in Sweden.

Rodney Cyril Sacks: What is your Nielsen in the 13 week period until the end of February 2024, monsters retail market share in value as compared to the same period. The previous year grew from 24% to 22, 6% in the Czech Republic from 29, 3% to 29, 9% in Italy and from 15.

Rodney Cyril Sacks: 9% to 17, 2% in Germany.

Rodney Cyril Sacks: According to Nielsen in the 13 week period until the end of February 'twenty 'twenty, four monsters retail market share in value as compared to the same period. The previous year remained flat at 18, 9% in Poland monsters retail market share in value as compared to the same period. The previous year declined from 27, 6% to 26.

Rodney Cyril Sacks: Monster's retail market share value, as compared to the same period the previous year, declined from 27.6% to 26.7% in Denmark and from 36.6% to 34.9% in Greece. According to Nielsen, in the 13-week period until the end of February 2024, Predator's retail market share value, as compared to the same period the previous year, grew from 31.9% to 34.3% in Kenya and from 19.5% to 20.8% in Nigeria.

Rodney Cyril Sacks: According to IRI, for all outlets combined in Australia, the energy drink category increased 9.5% for the four weeks ending April 7, 2024. Monster's sales increased 27.5%, and its market share in value increased 2.9 points to 20.3% against the comparable period the previous year. Sales of Mother increased 8%, and its market share decreased 0.1 of a share point to 11.1%. According to IRI, for all assets combined in New Zealand, the energy drink category increased 5.2% for the four weeks ending April 7, 2024.

Rodney Cyril Sacks: According to IRI for all outlets combined in Australia, the energy drink category increased nine 5% for the four weeks ending April seven 2020 for Monster sales increased 27, 5% monsters market share in value increased two nine points to 23%.

Rodney Cyril Sacks: The comparable period, the previous year sales of mother increased 8% and its market share decreased <unk> one of a share point to 11, 1%.

Rodney Cyril Sacks: Monster's sales decreased 0.5%. Monster's market share in value decreased 0.8 of a share point to 14.4% against the comparable period the previous year. Sales of Mother increased 36.2%, and its market share increased 1.5 share points to 6.6%. Sales of Live Plus decreased 8.8%, and its market share decreased 0.8 of a share point to 5.3%.

Rodney Cyril Sacks: According to Intaj in the Convenience Channel in Japan, the energy drink category decreased 7.5% for the month of March 2024, while Monster's sales increased 4.4%. Monster's market share value increased 6.8 points to 59.5% against the comparable period the previous year. According to Nielsen, all outlets combined in South Korea, the energy drink category increased 11.5% for the month of March 2024. We again point out that certain market statistics that cover single-month or four-week periods may often be materially influenced, positively or negatively, by promotions or other trading factors during those periods.

Rodney Cyril Sacks: Net sales to customers outside the U.S. were 744.1 million, 39.2% of total net sales, in the 2024 first quarter, compared to 622.9 million, or 36.7% of total net sales, in the corresponding quarter in 2023. Foreign currency exchange rates had a negative impact on net sales in U.S. dollars by approximately 64.4 million in the 2024 first quarter, of which 50.4 million related to Argentina. In MEA, net sales for the 2024 first quarter increased 28.2% in dollars and increased 32% on a currency-neutral basis over the same period in 2023. Gross profit in this region as a percentage of net sales for the 2024 first quarter was 34% compared to 30.7% in the same quarter in 2023.

Rodney Cyril Sacks: We executed a strategic initiative across EMEA in the first quarter with the launch of Monster Energy Sugar in 27 March. We are also pleased that in the first quarter of 2024, Monster gained market share in Belgium, the Czech Republic, France, Germany, Great Britain, Italy, the Netherlands, Norway, the Republic of Ireland, and Spain.

Rodney Cyril Sacks: There's Monster Zero Sugar.

Rodney Cyril Sacks: Sorry, Monster Zero Sugar increased 6% on a currency-neutral basis over the same period in 2023. Gross profit in this region as a percentage of net sales for the 2024 first quarter was 42.6% versus 44.4% in the same period in 2023. Net sales in Japan in the 2024 first quarter decreased 2.8% in dollars and increased 7.4% on a currency-neutral basis.

Rodney Cyril Sacks: In South Korea, net sales in the 2024 first quarter increased 1.2% in dollars and increased 4.3% on a currency-neutral basis as compared to the same quarter in 2023. Monster remains the market leader in Japan and South Korea. In China, net sales in the 2024 first quarter increased 16.4% in dollars and increased 21.2% on a currency-neutral basis as compared to the same quarter in 2023. We remain optimistic about the long-term prospects for the Monster brand in China and are excited about the launch of Predator this year. In Oceania, which includes Australia, New Zealand, Tahiti, French Polynesia, New Caledonia, Papua New Guinea, and Guam, net sales decreased 7.1% in dollars and decreased 3.6% on a currency-neutral basis.

Rodney Cyril Sacks: In Latin America, including Mexico and the Caribbean, net sales in the 2024 first quarter increased 14.7% in dollars and increased 46.2% on a currency-neutral basis over the same period in 2023, 10.9% exclusive of Argentina's impact. Gross profit in this region as a percentage of net sales was 42.8% for the 2024 first quarter versus 33% in the 2023 first quarter. In Brazil, net sales in the 2024 first quarter increased 32.2% in dollars and increased 25.6% on a currency-neutral basis.

Rodney Cyril Sacks: Net sales in Mexico increased 32.9% in dollars and increased 19.6% on a currency-neutral basis in the 2024 first quarter. Net sales in Chile decreased 16.3% in dollars and decreased 8.9% on a currency-neutral basis in the 2024 first quarter.

Rodney Cyril Sacks: And net sales in Argentina decreased 14.3% in dollars and increased 251.3% on a currency-neutral basis in the 2024 first quarter. We continued with the expanded distribution of The Beast Unleashed during the first quarter of 2024, which is now available in 49 states through a network of beer distributors and will be in all 50 states by the end of summer. We have begun the rollout of The Beast Unleashed in 24-ounce single-serve cans and are seeing early success while maintaining the base of 16-ounce single-serve cans that were launched last year.

Rodney Cyril Sacks: We are pleased with the results of The Beast Unleashed and are continuing to expand points of distribution of this brand. Nasty Beast, our new hot tea line, was launched in 12-ounce variety packs in January 2024 and in 24-ounce single-serve cans in February 2024 and is now available in 49 states.

Rodney Cyril Sacks: North Sea Beast, a new Hot Tea line was launched in 12 ounce variety packs in January 'twenty 'twenty, four and a 24 ounce single serve cans in February 'twenty 'twenty four and he is now available in 49 States. Early response to the brand has been positive and we are continuing to focus heavily on expansion.

Rodney Cyril Sacks: Early response to the brand has been positive, and we are continuing to focus heavily on the expansion of distribution. In the United States, in January, we launched Rainstorm Guava Strawberry and Citrus Zest. In February, we launched Monster Rehab Green Tea, Rain Sour Gummy Worm, Monster Juice Rio Punch, Monster Reserve Peaches and Cream, Monster Java Irish Cream, and Monster Energy Ultra Fantasy Ruby Red, and in the latter product, both in a 16-ounce and 12-ounce package. In March, we launched Rainstorm Strawberry, Apricot, and Mango.

Rodney Cyril Sacks: <unk> of distribution.

Rodney Cyril Sacks: In the United States in January we launched rainstorm guava, Strawberry and sit persist in February we launched monster rehab Green tea range seller gummy with Monster juice, Rio Punch Monster Reserve Peaches, and cream Monster Java, Irish cream and Monster energy Ultra fantasy.

Rodney Cyril Sacks: Ruby Red and in the leather product both in the 16 ounce and 12 ounce package in March we launched rainstorm Strawberry Apricot Mango. In addition to these launches we continue to innovate in a multi pack variety pack offerings.

Rodney Cyril Sacks: In addition to these launches, we continue to innovate in our multi-pack, variety-pack offerings. In Canada, during the first quarter, we launched Monster Energy Ultra Strawberry Dreams, Rain Turtle Body Fuel Cherry Limeade, Monster Reserve Orange Dreamsicle, and Monster Rehab Wildberry Tea. In Mexico, during the month of January, we launched Monster Energy Zero Sugar and Prednis Tropico. In Brazil and Puerto Rico, during the month of February, we launched our Monster Energy Zero Fat.

Rodney Cyril Sacks: In Canada during the first quarter, we launched Monster energy Ultra Strawberry Dreams reign total body fuel Cherry Limeade Monster Reserve Orange Dream, sickle and Monster rehab WILDBERRY team in Mexico. During the month of January we launched Monster energy zero sugar and Prentiss of tropical in Brazil, and Puerto Rico during the.

Rodney Cyril Sacks: In February we launched Monster energy zero sugar.

Rodney Cyril Sacks: In Oceania, during the first quarter of 2024, we launched two new innovations in Australia. In February, we launched Monster Energy Ultra Strawberry Dreams and Monster Energy Zero Sugar. In EMEA, in the first quarter of 2024, we launched Monster Juiced Monarch, Nitro Cosmic Peach, Reserve Orange Dreamsicle, and Ultra Peach Aquene in a number of countries.

Rodney Cyril Sacks: He now she added during the first quarter of 2024, we launched two new innovations within Australia in February we launched Monster energy Ultra Strawberry Dreams at Monster Energy zero sugar in EMEA in the first quarter of 'twenty 'twenty four we launched monster Joost monarch.

Rodney Cyril Sacks: <unk> Cosmic Peach reserve Orange Dream, sickle and ultra Peachy-keen in a number of countries additional launches are planned throughout EMEA in 2024 during.

Rodney Cyril Sacks: Additional launches are planned throughout EMEA in 2024. In the first quarter of 2024, we launched Monster Ultraviolet in Japan, Monster Ultra Peachy Queen in Korea, Taiwan, and Hong Kong, and Monster Pipeline Punch in China.

Rodney Cyril Sacks: During the first quarter of 2024, we launched Monster Ultra Violet in Japan Monster Ultra PD Peachy-keen in Korea, Taiwan, and Hong Kong and Monster pipeline punch in China. During the quarter. We also introduced credits or goldstrike in the Philippines and in Azerbaijan last month, we launched a noncash.

Rodney Cyril Sacks: During the quarter, we also introduced Predator Gold Strike in the Philippines and in Azerbaijan. Last month, we launched a non-carbonated Predator Gold Strike in a 500ml PET bottle in selected provinces in China. Initial acceptance from retailers and consumers has been positive. During the 2024 first quarter, the company purchased approximately 1.8 million shares of its common stock at an average purchase price of $54.96 per share for a total amount of $97.2 million, excluding broker commissions. As of May 2, 2024, approximately $642.4 million remained available for repurchase under the previously authorized repurchase program.

Rodney Cyril Sacks: The company intends to commence a modified Dutch auction tender offer for up to $3 billion in value of shares of its common stock, subject to market conditions at a specified price range that is yet to be determined. The company believes that the tender offer represents an efficient mechanism to permit shareholders the opportunity to obtain liquidity without the potential disruption that can result from market sales. The company expects to fund the tender offer with approximately $2 billion of cash on hand and approximately $1 billion in combined borrowings, consisting of a new revolving credit facility and a new delayed draw-term loan facility, each expected to be consummated prior to the completion of the tender offer.

Rodney Cyril Sacks: The tender offer will be made outside of the company's previously authorised repurchase programs and will allow the company to retain the ability to purchase additional shares through the previously authorised repurchase programs in the future. The company's co-CEOs, namely Hilton and myself, have indicated that we intend to participate in the offer for investment diversification and estate planning purposes. My participation, in particular, may provide me with some flexibility to consider my own potential options, which may also help the company continue succession planning for its next phase of leadership.

Rodney Cyril Sacks: In this regard, after consultation with the company's board, I am considering reducing my day-to-day management responsibilities starting in 2025 while continuing to manage certain areas of the company's business for which I have always been responsible. At that time, I intend to remain chairman of the company's board, and Mr. Schlosberg would transition from co-CEO to CEO.

Rodney Cyril Sacks: We estimate that on a foreign currency-adjusted basis, including the alcohol brand segment, April 2024 sales were approximately 12.9% higher than the comparable April 2023 sales and 14.9% higher than April 2023, excluding the alcohol brand segment. Excluding Argentina's impact, we estimate that on a foreign currency adjusted basis, including the alcohol brand segment, April 2024 sales were approximately 11.5% higher than the comparable April sales and 13.5% higher than April 2023, excluding the alcohol brand segment.

Rodney Cyril Sacks: Excluding Argentina's impact we estimate that on a foreign currency adjusted basis, including the alcohol brands segment April 'twenty 'twenty four cells were approximately 11, 5% higher than the comparable April cells, and 13, 5% higher than April 2023, excluding the alcohol brands says.

Rodney Cyril Sacks: We estimate April 2024 cells, including the alcohol brands segment to be approximately 10% higher than in April 2023, and $11, 9% higher than in April 2023, excluding the alcohol brand segment April 2024, with two more selling days compared to April 2023.

Rodney Cyril Sacks: We estimate April 2024 sales, including the alcohol brand segment, to be approximately 10% higher than in April 2023 and 11.9% higher than in April 2023, excluding the alcohol brand segment. April 2024 had two more selling days compared to April 2023. 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 and the timing of price increases, promotions in retail stores, distributive incentives, as well as shifts in the timing of production.

Rodney Cyril Sacks: Hi.

Rodney Cyril Sacks: In this regard we caution a guy in 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 and the timing of price increases and promotions in retail stores distributor incentives as well as shift.

Rodney Cyril Sacks: And the timing of production in <unk>.

Rodney Cyril Sacks: 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.

Rodney Cyril Sacks: Some instances our bottlers are responsible for production and determine their unproductive schedule. 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 may alter from time to time for their own business reason.

Rodney Cyril Sacks: <unk>.

Rodney Cyril Sacks: 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.

Rodney Cyril Sacks: In conclusion, I would like to summarize some recent positive points. The energy category continues to grow globally. We are pleased to report that our pricing actions have not significantly impacted consumer demand.

Speaker Change: In conclusion, I would like to summarize some recent positive points the energy category continues to grow globally.

Rodney Cyril Sacks: We are pleased to report that our pricing actions have not significantly impacted consumer demand.

Rodney Cyril Sacks: Our AFF flavor facility in Ireland is now providing a larger number of flavors to our EMEA region, enabling better service levels and lower landed costs for our EMEA region. We are in the process of constructing a juice facility at our AFF flavor facility in Ireland. We have a robust innovation plan for 2024. Beast Unleashed is performing well. We are excited for Nasty Beast Hot Tea, as well as the additional alcohol opportunities that Monster Brewing Company presents.

Rodney Cyril Sacks: <unk> flight and facility in Ireland is now providing a larger number of flavors to our EMEA region, enabling better service levels and lower landed cost to our EMEA region. We are in the process of constructing a juice facility at our <unk> flavor facility in Ireland, we have a robust innovation.

Rodney Cyril Sacks: Plan for 2020 for visa leased is performing to expectations. We are excited for nasty Beast Hot tea as well as the additional alcohol opportunities that monster Brewing company presents initial acceptance from retailers and consumers has been positive. We are pleased with the rollout of credits in theory are affordable.

Rodney Cyril Sacks: Initial acceptance from retailers and consumers has been positive. We are pleased with the rollout of Predator and Fury, our affordable energy drink portfolio, in a number of markets internationally, including the launch last month of Predator in a non-carbonated formula in 500 ml PET bottles in selected provinces in China. We are proceeding with plans for further launches of our affordable energy brand. We are excited about the opportunities that the acquisition of the Bang Energy brand presents to us and believe that the brand will fit well within our broader portfolio of energy drink brands.

Rodney Cyril Sacks: Energy drink portfolio and a number of markets internationally, including the launch last month of predator in a non carbonated formula and father M. L. P. T bottles and selected provinces in China, we are proceeding with plans for further launches of our affordable energy brands.

Rodney Cyril Sacks: We are excited about the opportunities that the acquisition of the Bang energy brand presents to us and believe that the brand will fit well within our broader portfolio of energy drink brands.

Rodney Cyril Sacks: The company achieved record first quarter net sales of $1.9 billion in the 2024 first quarter, 11.8% higher than net sales of $1.7 billion in the 2023 comparable period, and 15.6% higher on a foreign currency adjusted basis, or 12.6% exclusive of Argentina's impact. I would now like to open the floor to questions about the quarter. Thank you.

Rodney Cyril Sacks: The company achieved record first quarter net sales of $1 9 billion in the 'twenty 'twenty four first quarter, 11.8% higher than net sales of $1 7 billion in the 'twenty to 'twenty three comparable period, and 15, 6% higher on a foreign currency adjusted basis or 12 six.

Rodney Cyril Sacks: <unk> exclusive of Argentina's impact a lot now like to open the floor to questions about the quarter. Thank you.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one, on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: You are using a speakerphone please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you would like to withdraw. It. Please press Star then two we request that you limit yourself to one question only if you have any follow up you may rejoin the queue at any time at this time, we will pause momentarily to.

Operator: If at any time your question has been addressed and you would like to withdraw it, please press star, then two. We request that you limit yourself to one question only. If you have a follow-up, you may rejoin the queue at any time. At this time, we will pause momentarily to assemble our roster. Our first question comes from Filippo Falorni of Citi. Please go ahead.

Filippo Falorni: Assemble our roster.

Filippo Falorni: Our first question comes from Filippo <unk> of Citi.

Filippo Falorni: Please go ahead.

Filippo Falorni: Hey, good evening, everyone. I just wanted to ask about the April number you just gave. I know one month of data is not indicative of your long-term results, but just maybe clarify what's in there. Is the two extra days included in the number? Because that alone can get you to about 10 points of growth and maybe any timing-related impact that impacted the number compared to, say, what you just reported in Q4. That would be helpful. Thank you.

Filippo Falorni: Hey, good evening everyone.

Filippo Falorni: I just wanted to ask on the April number you just gave I know one month of data.

Filippo Falorni: Not indicative of long term results, but.

Filippo Falorni: Just maybe clarify what's in there is the two extra day included in the number does that alone can get you to about 10 points of growth and maybe any timing related impacts that impacted that number.

Filippo Falorni: And I got what you just reported in Q4 and that will be helpful. Thank you.

Filippo Falorni: The two extra days in April.

Rodney Cyril Sacks: The two extra days in April were obviously included in the numbers that we reported for April sales. The second part of your question I actually didn't really understand, so maybe you can repeat it.

Speaker Change: Included in the numbers that we reported for April sales.

Rodney Cyril Sacks: Hmm.

Speaker Change: The second part of your question I actually didn't really understand so maybe you can repeat it.

unknown: Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change: Sure I was just curious like in <unk>.

unknown: Any impact in terms of shipment timing to the bottlers, considering the trends that we've seen in Q4, it seems up material deceleration.

unknown: So wondering why don't Zhang timing impacting that number Fernando.

Rodney Cyril Sacks: Yeah, so, you know, we've always spoken in our business about the fact that we sell to the bottom, and in some cases, the bottlers, particularly internationally, produce products for us, which we purchase from the bottlers and then sell to them as part of the distribution arrangement. And oftentimes, they determine when they want to produce, so we expect them to produce on such and such a day, in such and such a month.

Rodney Cyril Sacks: We sell to the boxes and in some cases, the bottlers, particularly internationally manufacture products for us, which we purchase from the bottlers and then sell to them.

Rodney Cyril Sacks: As part of the distribution arrangements and oftentimes they determine when they want to produce so we expect them to produce and such and such a day and such and such a month. They may produce in the subsequent months.

Rodney Cyril Sacks: They may produce in the subsequent month. Or they may produce earlier. So when we talk about our sales, remember, they are sales to the bottlers. They're not sales to, we do some business directly with customers. But most of our sales are done to the bottlers.

Rodney Cyril Sacks: Or they may produce earlier.

Rodney Cyril Sacks: So when.

Rodney Cyril Sacks: When we talk about ourselves remember that ourselves to the bottlers, there or not sales.

Rodney Cyril Sacks: We do some business.

Rodney Cyril Sacks: At our direct to customers, but most of our sales are done to the Barclays.

Rodney Cyril Sacks: Our next question comes from Andrea Teixeira of JP Morgan. Please go ahead.

Operator: Our next question comes from Andrea Teixeira of J.P. Morgan. Please go ahead.

Andrea Faria Teixeira: Thank you, and good afternoon everyone. I was hoping you could talk a bit about how we should be thinking about the consumer and, particularly, in the U.S. We have been hearing a lot of your peers talk about a softening and what we should be thinking about in the context of pricing that you potentially alluded to some of your competitors have taken pricing you decided to just stay put at this point. Anything you can add and how it relates to aluminum going up on the spot price. Thank you. Ciao!

Andrea Faria Teixeira: Thank you and good afternoon, everyone I was hoping if you can.

Andrea Faria Teixeira: Talk a bit about how we should be thinking of the consumer, particularly in the U S. A and we have been hearing a lot of your peers talk about a softening and how we should be thinking of.

Andrea Faria Teixeira: Context half pricing that you potentially I alluded to some of your competitors have taken pricing.

Andrea Faria Teixeira: And you decided to.

Andrea Faria Teixeira: Sustained point at this point anything you can add and how it relates to the alumina.

Rodney Cyril Sacks: So, you know, this is a repeated question from you, and thanks for raising it again. As you know, we have a very strong brand. The brand is an affordable luxury, and it's strategic for us to orchestrate when and if we will take prices. So, you know, I think we've done a lot of evaluation on what makes sense and what makes sense for the brand. As we said, we would. And, in principle, we have really worked hard at really coming to a decision that a pricing opportunity, you know, is out there.

Andrea Faria Teixeira: So.

Rodney Cyril Sacks: This is a repeated questions from you and thanks for raising it again.

Rodney Cyril Sacks: As you know we have a very strong brand.

Rodney Cyril Sacks: The brand is an affordable luxury.

Rodney Cyril Sacks: So.

Rodney Cyril Sacks: I think we've done a lot of evaluation on what makes sense and what makes sense for the brand as we said we would.

Rodney Cyril Sacks: And in principle, we have really worked hard at.

Rodney Cyril Sacks: Really coming to a decision that a pricing opportunity.

Rodney Cyril Sacks: You know is out there and we.

Rodney Cyril Sacks: And we, you know, I'm not saying how much it's gonna be. It's gonna be later this year. But we will be announcing it to bottlers and retailers, you know, sometime in the next few months because there's a 30 to 60 day, mainly 60 days, for the implementation of a price increase. But we expect it to happen in the fourth quarter.

Rodney Cyril Sacks: You know I'm, not saying how much it's going to be it's going to be later this year.

Rodney Cyril Sacks: But we will be announcing to our partners and retailers.

Rodney Cyril Sacks: Sometime in the next few months because this is.

Rodney Cyril Sacks: In the fourth quarter.

Operator: The next question comes from Peter Grom of UBS. Please go ahead.

Peter K. Grom: Go ahead.

Peter K. Grom: Thanks, operator. Good afternoon, everyone. I hope you're doing well.

Peter K. Grom: Thanks, operator, good afternoon, everyone hope you're doing well.

Peter K. Grom: No.

Peter K. Grom: Changes for some time, but congrats on kind of the new roles to come I guess I just wanted to ask about the Dutch auction announced Tonight, just kind of just love some perspective on the decision process.

Rodney Cyril Sacks: Rodney, I know there's been changes for some time, but, you know, congrats on kind of the new roles to come. I guess I just wanted to ask about the Dutch auction announced tonight. I just kind of would love some perspective on the decision process. Why now? Why using debt? Is this a change in terms of how you're thinking about the long-term balance sheet return, or is this just kind of a short-term dynamic? And last, I'm not sure if I missed this, but did you provide any color on timing as it relates to this?

Rodney Cyril Sacks: Now why do you think.

Rodney Cyril Sacks: It can change in terms of how youre thinking about the balance sheet longer term or is this just kind of a short term dynamic and lastly, I'm not sure. If I missed this but did you provide any color on timing as it relates to thanks.

Rodney Cyril Sacks: I think that you know it's a question of timing I think that given the recent softness in the market. We believe that it is an opportunistic time to execute and at scale transaction of this nature.

Rodney Cyril Sacks: I think that, you know, it's a question of timing. I think that, given recent softness in the market, we believe that it is an opportunistic time to execute an at-scale transaction of this nature. We believe that this structure gives the company the opportunity to repurchase a greater number of shares and do so more quickly than we could under the programs which we've implemented. As you know, over the, you know, by quarter by quarter, we've continually, you know, strategically, you know, bought back stock.

Rodney Cyril Sacks: We believe that this structure gives the company the opportunity to repurchase a greater number of shares and do some more quickly than we could under the program, which we've implemented as you've noted over the <unk>.

Rodney Cyril Sacks: Quarter by quarter, we've continually.

Rodney Cyril Sacks: Strategically.

Rodney Cyril Sacks: <unk> bought stock back we think that is a good use of our cash obviously, we look at acquisitions from top drive, but we have a lot of excess cash and if you remember we did a similar.

Rodney Cyril Sacks: We think that is a good use of our cash. Obviously, we look at acquisitions from time to time, but we have a lot of excess cash. And, if you remember, we did a similar modified Dutch auction in 2016 that was very successful. It enabled the company to buy back shares, and, you know, and we moved on.

Rodney Cyril Sacks: Modified Dutch auction in 2016 that we thought was very successful and has enabled the company to buy back shares and you know and we moved on so we think the timing is right. We think that will probably implemented.

Rodney Cyril Sacks: So we think the timing is right. We think that we'll probably implement it, you know, shortly in the next week or so. We'll come out with, you know, the documentation and the formal announcement this quarter. You know, we also want to make the point that, you know, the tender offer is going to be in addition to our existing plans, which will remain in place, and that will also continue to give us the opportunity to, again, continue to buy additional shares as and when, you know, opportunistically, we think we should.

Rodney Cyril Sacks: Shortly in the next week or so we will come out with.

Rodney Cyril Sacks: We also want to make the point that the tender offer is going to be in addition to our existing plans, which will remain in place and that will continue to give us opportunities to again to continue to buy.

Rodney Cyril Sacks: By additional shares as and when Opportunistically, We think we should we should.

Rodney Cyril Sacks: The next question comes from Chris Carey of Wells Fargo Securities.

Operator: The next question comes from Chris Carey of Wealth Fargo Securities. Please go ahead.

Christopher Michael Carey: Go ahead.

Christopher Michael Carey: Hi, everyone. Thank you for the question.

Christopher Michael Carey: Hi, everyone. Thank you for the question. Um, just a follow up on the pricing announcement in Q4. Is that for the entire US portfolio? Is that the plan?

Christopher Michael Carey: Just a follow up on the pricing announcement in Q4 is that on the entire U S portfolio is that the plan and then just.

Christopher Michael Carey: Question would be I.

Christopher Michael Carey: I think the bad.

Christopher Michael Carey: International gross margin in.

Christopher Michael Carey: And several years and so is there anything structural Lee occurring in your international margin structure.

Rodney Cyril Sacks: And then just the, you know, the question would be, I think this is the best international gross margin in several years. And so is there anything structurally occurring in your international margin structures? Or is this just maybe maybe just easing commodities, easing import costs, easing? So the basic question is, is this just more cyclical and commodities? Or, or is there something else going on within your international gross margins? Thanks. So, uh, referring to...

Rodney Cyril Sacks: Yes.

Rodney Cyril Sacks: Maybe just easing commodity easing import cost easing.

Rodney Cyril Sacks: So.

Rodney Cyril Sacks: The basic question is this just more cyclical in commodities or or is there something else going on within your international gross margins.

Rodney Cyril Sacks: So, referring to your first question, and you asked a question about us, if you look at this, if you look at this quarter, we had a pickup, obviously, in international margins, which we've been working on for some time, particularly in EMEA, and we also had a pickup in U.S. margins, So we've been working on improving margins across the board. You'll remember that I spoke in the fourth quarter when we had our final year results.

Speaker Change: So referring to your first question.

Rodney Cyril Sacks: And.

Rodney Cyril Sacks: You asked a question about.

Rodney Cyril Sacks: Gross margins and we.

Rodney Cyril Sacks: If you look at this if you look at this quarter.

Rodney Cyril Sacks: We had a pick up obviously in international margins.

Rodney Cyril Sacks: Which we've been working on for some time, particularly in EMEA and we also had a pickup in U S margins. So.

Rodney Cyril Sacks: Improving margins across the board you will remember that I spoke in.

Rodney Cyril Sacks: And I said that our gross margin then had a few non-recurring items in basically true ups and rebate programs that were recognized in that fourth quarter. And I said that on an ongoing basis, on a standalone basis, we expected margins to be at about the 53.5% level. Well, we did better than that. And it's something we've been working on and will continue to work on in trying to improve gross margins.

Rodney Cyril Sacks: In the first.

Rodney Cyril Sacks: In the fourth quarter, when we had our final year results and I'll say that our gross margin and then had a few nonrecurring items in basically trups and rebate programs that are where we're recognized in the in that fourth quarter and I'd say that on an ongoing basis on a standalone basis we.

Rodney Cyril Sacks: As expected our margins to be at the about the 53.5% level well you know, we did better than that and it's something we've been working on and will continue to work on.

Rodney Cyril Sacks: In trying to improve gross margins.

Rodney Cyril Sacks: Yeah.

Rodney Cyril Sacks: Okay.

Operator: Our next question comes from Bonnie Herzog of Goldman Sachs. Please, go ahead.

Rodney Cyril Sacks: Our next question comes from Bonnie Herzog of Goldman Sachs. Please go ahead.

Bonnie Lee Herzog: Thank you and congratulations to you both, I guess, pending Rodney's decision. I have a question on your U.S. sales growth in the quarter, which, you know, was, I guess, a decent step down. And, you know, it sounds like your business is maybe slowing month to month during the quarter and then a little bit in April. So could you touch on what's driving the slowdown, really, really for the entire

Bonnie Lee Herzog: Thank you and congratulations to you both I guess pending Rodney.

Bonnie Lee Herzog: Yeah.

Bonnie Lee Herzog: Well I think that's a decent step down in <unk>.

Bonnie Lee Herzog: It sounds like you have.

Bonnie Lee Herzog: Maybe just following month to month during the quarter.

Bonnie Lee Herzog: So could you touch on what's driving that.

Bonnie Lee Herzog: The only problem higher category.

Bonnie Lee Herzog: I'm also curious about the light.

Bonnie Lee Herzog: One of those in the pipeline.

Rodney Cyril Sacks: I guess I'm also curious about this in light of your robust innovation pipeline and, I think, shelf space gains. And then you mentioned that you continue to grow your sales in non-Nielsen measured channels. So first, could you just maybe clarify how your sales are performing on your end in the measured channels? And then could you give us a sense of what percentage of your business is now in non-measured channels, I guess, in the U.S.? Thanks.

Rodney Cyril Sacks: So channels.

Rodney Cyril Sacks: Because you've got a profile.

Rodney Cyril Sacks: What percentage of your business is now.

Rodney Cyril Sacks: Channels Neil.

Rodney Cyril Sacks: So, Bonnie, we don't report what percentage of our sales is done in the non-measured channels. So it's hard for me to give an answer to that since we don't report it, but it's something we can consider doing in the future. But our non-measured channels remain strong, and as you know, we have a bunch of really important customers in that category, including FSOP, Food Service On-Premise. We have one of the big club store chains in that non-measured channel. We have Home Depot, Lowe's, and Amazon.

Rodney Cyril Sacks: The money, we don't report what percentage of our sales is done in the non measured channels.

Rodney Cyril Sacks: So.

Rodney Cyril Sacks: It's hard for me to give an answer to that since we don't report it but it's something we can consider doing in the future but are non measured channels remains strong.

Rodney Cyril Sacks: <unk>.

Rodney Cyril Sacks: As you know we are we have a bunch of really important customers in that category, including FSP foodservice on premise.

Rodney Cyril Sacks: We have one of the Big club.

Rodney Cyril Sacks: Club store chains is.

Rodney Cyril Sacks: In that are in that non measured channel, we have a home depot Lowe's Amazon. So we do have a bunch of customers that operate in that.

Rodney Cyril Sacks: So we do have a bunch of customers that operate in those non-measured channels. And you can see the discrepancy between the Nielsen numbers and what we report as a company because, A, the Nielsen numbers are sales to consumers. We report on sales to bottlers and direct customers, and we also include sales to our non-measured channels. And then I just wanted to get back to a previous question where it was asked whether that price increase that we referred to would be across the whole portfolio.

Rodney Cyril Sacks: And there is non measured channels and you can see the discrepancy between.

Rodney Cyril Sacks: And when we look at the portfolio in the U.S., we have a number of different product lines, but the reference to the price increase will be on the main Monster Energy line and possibly some of the others, but that also has not been clarified as yet.

Rodney Cyril Sacks: We look at the portfolio in the U S.

Rodney Cyril Sacks: We have a number of of different product lines, but the reference to the price increase will be on the main monster Monster Energy line.

Rodney Cyril Sacks: Our next question comes from Camille Gagawala of Jefferies.

Operator: Our next question comes from Camille Gagarwalla of Jeff. Please go ahead.

Operator: Our next question comes from Kamil Gagrewala of Jeff. Please go ahead. Can I try maybe following up on Bonnie's question?

unknown: ....

Kaumil S. Gajrawala: Please go ahead.

Operator: Yeah.

Speaker Change: Alright, I tried to be.

Kaumil S. Gajrawala: Following up on Bonnie's question, a little bit more is at least from the data and stuff that we're seeing it sounds like there is maybe more of a slowdown.

Kaumil S. Gajrawala: And then perhaps.

unknown: Yeah.

unknown: There clearly has been a.

Rodney Cyril Sacks: There clearly has been a..., a slight slowdown. I mean, I think that you guys follow a lot of the consumer product companies, both beverage and non-beverage. And I think that there are, including a lot of the convenience chains who report as well.

Rodney Cyril Sacks: And I think there has been a report, you know, generally across the board, that there is some slowdown. But I think you've got to take it into account that, you know, last year there was a lot of acceleration, there were increased sales, so you're looking at it on a two-year basis as well. But there is some softness.

Rodney Cyril Sacks: Taking into account that last year. There was a lot of acceleration that were increased sales. So youre looking looking at it on a two year basis as well.

Rodney Cyril Sacks: But there is some there is some softness we think that you know.

Rodney Cyril Sacks: We think that, you know, inflation and high gas prices are having an effect on the number of consumers that are going into the stores and driving. And so I think that is something we're sort of experiencing industry-wide. We think that, you know, things will pick up. We think that, you know, summer's coming. But that has been something you've noticed, and you guys see that. You know, you read the Nielsen ratings as we do.

Rodney Cyril Sacks: Inflation and higher gas prices are having an effect on.

Rodney Cyril Sacks: The number of consumers at all going into the stores.

Rodney Cyril Sacks: Reveling and so I think that is something I think we're sort of industry wide are experiencing we think that things will will pick up we think that you know some is coming.

Rodney Cyril Sacks: But that has been something you've noticed that you guys see that you read the nielsen's as we do but we also look to other channels too to look at increased sell.

Operator: But we also look to other channels to look at increased sales. And, you know, through the other channel business, we have continued to have healthy sales. And obviously, we are introducing a lot of innovation that's getting listings now. So we are looking, you know, positively, at how that will affect sales going forward. The next question comes from Michael Lavery of Piper Sandler. Please go ahead.

Operator: Through the other channel business, we have continued to have healthy sales and obviously, we are introducing a lot of innovation. That's getting listings now. So we are looking positive to how that will implement to say ourselves going forward.

Operator: The next question comes from Michael Lavery of Piper Sandler.

Michael Scott Lavery: Please go ahead.

Michael Scott Lavery: Thank you good evening.

Michael Scott Lavery: Can you just give us an update on bang and to some of your thinking on how it's progressing and specifically maybe some of the marketing activation or distribution momentum.

Michael Scott Lavery: What we might expect for plans for the rest of the year.

Rodney Cyril Sacks: So if you look at BANG! and look at the last four weeks, you'll see that sales are starting to accelerate, mainly because we've been able to get listings as we move through this season of listings in the chains. As you know, the brand was discontinued for a number of reasons last year, and it's been a real impetus to get the brand up and running. We believe it has, and we believe it's moving positively.

Michael Scott Lavery: So if you look at.

Rodney Cyril Sacks: Look at Bang and look at the latest four weeks, you'll see that sales are starting to accelerate.

Rodney Cyril Sacks: And mainly because we've been able to get listings as we move through this season of.

Rodney Cyril Sacks: Of listings in the change.

Rodney Cyril Sacks: As you know the bandwidth discontinued for a number of reasons last year and it's been a real impetus to get the brand up and running we believe it is.

Rodney Cyril Sacks: It has and we believe it's moving positively.

Rodney Cyril Sacks: The marketing for the brand has really been at a low ebb, and it's gaining momentum as we move into the summer. We're in the process of accelerating, and I've got to be careful what I say, but a large influencer platform to help move and accelerate the brand. So the marketing is underway. It's just taking a little bit of time to get it up and running. As I said earlier, or as I said in previous calls, it's positioned as a lifestyle brand, and we believe that we have to invest in the market, we accept that, to achieve the positioning that we're looking for.

Rodney Cyril Sacks: The marketing for the brand is.

Rodney Cyril Sacks: Yes.

Rodney Cyril Sacks: Really mean it.

Rodney Cyril Sacks: And it's gaining momentum as we move into the summer.

Rodney Cyril Sacks: We in the process of.

Rodney Cyril Sacks: Accelerating.

Rodney Cyril Sacks: And I've got to be careful what I say, but a large influence.

Rodney Cyril Sacks: Our platform to to help move and accelerate the brands. So the marketing is underway. It's just taking a little bit of time to get it up and moving as I said earlier.

Rodney Cyril Sacks: Said in previous calls its position as a lifestyle brand.

Rodney Cyril Sacks: And we.

Rodney Cyril Sacks: We believe that too.

Rodney Cyril Sacks: Yes.

Rodney Cyril Sacks: Have to invest market, we accept that and.

Rodney Cyril Sacks: To achieve the positioning that were looking for.

Rodney Cyril Sacks: The next question comes from Peter Galbo from Bank of America. Please.

Operator: The next question comes from Peter Galbo from Bank of America.

Peter Thomas Galbo: Go ahead.

Peter Thomas Galbo: Hey, guys. Good afternoon, Thanks for taking my question.

Peter Thomas Galbo: Hey guys, good afternoon. Thanks for taking the time to answer the question. Maybe I just actually wanted to ask you not on the gross, the gross margin line, but on some of the operating expense lines. I mean, there's been quite a sizable build, I think, in some of those numbers, and certainly out of, I think, what the street had. I'm just curious, is there any timing, you know, shift there? Or is there any build in terms of the, I don't know, distribution expense ahead of, you know, either shelf resets or bang rolling out more significantly? Just kind of want to understand how you're thinking about that going forward. Thanks.

Peter Thomas Galbo: Maybe just actually wanted to ask but not on the gross the gross margin line, but on some of the operating expense lines. I mean, there's been quite a sizable build I think in some of those numbers and certainly out of I think what the street had.

Peter Thomas Galbo: I'm just curious is there any timing you know shift there or is there any build in terms of the I dunno distribution expense ahead of.

Peter Thomas Galbo: Either shelf resets or Bang rolling out more significantly just kind of want to understand how youre thinking about that going forward. Thanks.

Rodney Cyril Sacks: Well, on the one hand, you know, we took a conscious decision to build up inventory. So, um... In doing so, we really had this objective of satisfying demand, which we really did not do very well at in previous years. So we have significant inventories now, and our in-stock rates are climbing in the 95 plus percent level. So we're able to serve customers much better, but obviously, there's a cost to it. And freight, as you know, has gone up. So that's one factor. Warehousing has gone up, so that's one factor in operating expenses. There's nothing that's tied to any particular period.

Speaker Change: Well on the one hand, we took a conscious decision to build up inventories so.

Rodney Cyril Sacks: In doing so we are you know we really had this objective of satisfying demand, which we really did not do very well that in previous years. So we have significant inventories now.

Rodney Cyril Sacks: Our in stock rates are climbing in the 95% levels.

Rodney Cyril Sacks: So we are able to service much better, but obviously theres a cost to it and face.

Rodney Cyril Sacks: As you know has gone up.

Rodney Cyril Sacks: And so that's one fact warehousing has gone up so that's one factor in the <unk>.

Rodney Cyril Sacks: Operating expenses, there's nothing that's really.

Rodney Cyril Sacks: That's tied to any particular.

Rodney Cyril Sacks: Period. These all expenses that were incurred within the quarter and they reported has been in the quarter sponsorships were up.

Rodney Cyril Sacks: These are all expenses that were incurred within the quarter, and they're reported as being in the quarter. So the costs are up, payroll is up, so there's a bunch of them, and you'll see it more effectively in the queue, the number of cost items that are up. And as before, we do maintain a huge objective to get costs down, so these increases do not get unnoticed, but unfortunately, they're part of doing business in the world in which we live, and we have competitors, and we have to negotiate for the best marketing dollars that we can.

Rodney Cyril Sacks:

Rodney Cyril Sacks: Payroll is up.

Rodney Cyril Sacks: So there's a.

Rodney Cyril Sacks: Theres a bunch of Av.

Rodney Cyril Sacks: You'll see it in more effectively in the Q and a number of cost items that are up and as before.

Rodney Cyril Sacks: Do maintain a huge objective to get costs down. So these increases do not get unnoticed, but unfortunately, they part of doing business in.

Rodney Cyril Sacks: The world in which we're living and we have competitors and we.

Rodney Cyril Sacks: Oh yeah.

Rodney Cyril Sacks: We have to negotiate for the best marketing dollars that we can.

Rodney Cyril Sacks: Yeah.

Rodney Cyril Sacks: Well I don't think.

Rodney Cyril Sacks: The only thing I would add is that, you know, when you look at the costs, we've had increases in sponsorship, in marketing, and social media. Those probably are the biggest cost increases. But we are, you know, diverting or focusing a little more on the social media platforms because of the full array of our brands that are more aligned with social media consumers. Those are going to take effect, and we have these programs being put in place, and we're obviously, you know, expensing those costs as we incur them, but I think some of the benefits will start, and we're hoping we'll start seeing them in the second and third quarter as we go into the summer and those programs become more active.

Rodney Cyril Sacks: I would add is that.

Rodney Cyril Sacks: When you look at the costs and we've had increases in sponsorship and marketing and social media, there's probably all the biggest cost increases, but we are.

Rodney Cyril Sacks: Diverting of focusing a little more on the social media platform because of the full array of our brands that are more aligned to social media consumers.

Rodney Cyril Sacks: Those are going to take effect and we have these programs being put in place and we're obviously expensing those costs as we could but I think some of the benefits will start.

Rodney Cyril Sacks: Hoping we will start seeing them in the second and third quarter as we as we go into summer and those programs become more active.

Rodney Cyril Sacks: Our next question comes from Mark a stretching of Stifel. Please go ahead.

Operator: Our next question comes from Mark Astrachan of Stiefel. Please go ahead.

Mark Stiefel Astrachan: Hey, thanks. Afternoon, guys. I wanted to ask who's going to be reading all of the country market share numbers, Rodney, when you transition to the sole chairman role? Just kidding.

Mark Stiefel Astrachan: Hey, Thanks afternoon guys.

Mark Stiefel Astrachan: Wanted to ask who who's gonna be reading all of the country market share numbers Rodney when you transition to the chairman role just kidding.

Hilton H. Schlosberg: I'm going to leave it to Rodney to do that.

Mark Stiefel Astrachan: I'm going to leave Rodney to do that.

Speaker Change: That's right.

Speaker Change: Seriously I wanted to ask about international gross margins.

Rodney Cyril Sacks: Seriously, I wanted to ask about international gross margins. I'm just curious how you think about the ability to potentially improve those in negotiating specifically better economics with the Koch system as Monster's importance to the system and to their revenue and profitability increases. And I guess maybe, you know, thinking about it. Broadly, right, a lot of these agreements were struck nine years ago, so the 10 year anniversary next year. I know some are up for renewal then,

Rodney Cyril Sacks: Curious, how you think about the ability to.

Rodney Cyril Sacks: Potentially improve those.

Rodney Cyril Sacks: In negotiating specifically better economics with the Coke system as mobsters importance to the system into their revenue and profitability increases and I guess, maybe thinking about it.

Rodney Cyril Sacks: Broadly right. There are a lot of these agreements were struck nine years ago. So.

Rodney Cyril Sacks: 10 year anniversary next year I know some are up for renewal then what about on a go forward basis and sort of how do you think about those discussions with the system.

Rodney Cyril Sacks: Yeah, Mark, thanks. Thanks for that question.

Speaker Change: Yeah. Thanks, Thanks for that question I'm going to put you in that position.

Speaker Change: Dealing with our boxes in.

Rodney Cyril Sacks: I want to put you in that position. Dealing with the bottlers, and you've got a lot of experience, I know, in talking to them, but that's really a tough egg to crack. So, we have to do it in different ways. We've got to look at commodities, we have to look at it in terms of pricing, and we've got to look at it in a very judicious manner with the bottling community. We have a great business going.

Rodney Cyril Sacks: And you've got a lot of experience I know and talking to them, but that's that's really a tough act to Craig So we.

Rodney Cyril Sacks: We have to do it in different ways, you know, we got to look at commodities.

Rodney Cyril Sacks: We have to look at it in terms of pricing and we've got it.

Rodney Cyril Sacks: Look at it in a very judicious manner with our with our bottling community we have.

Rodney Cyril Sacks: The next question comes from Peter Grom of UBS.

Operator: The next question comes from Peter Grom of UBS.

Peter K. Grom: Please go ahead.

Peter K. Grom: Thanks for taking my follow-up here. I guess just on the price increase, just the question I've gotten a few times, is there anything you can share in terms of the magnitude of the US fourth quarter price increase? Thanks. Peter, you know...

Rodney Cyril Sacks: Peter, you know, it's really difficult because we've come to an assessment and before we go out to our bottlers and our retailers, it would be, you know, it would not be appropriate for me to talk about that at this stage.

Speaker Change: Peter it's really difficult because we've come to an assessment.

Speaker Change: It would not be appropriate for me to talk about that at this stage.

Moderator: This concludes our question and answer session I would like to turn the conference back over to Mr sacks for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Sacks for any closing remarks. Thanks.

Sacks: Thanks. Thank you on behalf of Monster I'd like to thank everyone for their continued interest in the company. We continue to believe in the company and our growth strategy and remain committed to continue to innovate to develop and differentiate our brands and to expand the company both at home and abroad and in particular capitalizing on our relationship.

Rodney Cyril Sacks: Thanks. Thank you.

Rodney Cyril Sacks: On behalf of Monster, I'd like to thank everyone for their continued interest in the company. We continue to believe in the company and our growth strategy and are committed to continuing to innovate, to develop and differentiate our brands and to expand the company both at home and abroad, and in particular to capitalizing on our relationship with the Coca-Cola bottling system. We believe that we are well positioned in the beverage industry and continue to be optimistic about the future of the company. We hope that you remain safe and healthy. Thank you very much for your attendance.

Speaker Change: The conference has now concluded.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Okay.

Operator: [music].