MNST (Trans): Net sales top $2.5bn; U.S. price hike in Q4

Recap of Monster Beverage FY26 Q2 earnings call, compiled by Dolphin Research

I. Key takeaways

1. Shareholder returns and capital actions: No common shares were repurchased in Q2. As of Aug 5, 2026, approx. $900 mn remained under the prior authorization. The BOD approved and declared a 2-for-1 stock split; shares are expected to trade on a split-adjusted basis starting Aug 11, 2026.

2. Jul sales and pricing cadence (the company does not provide formal guidance)

Jul sales: On a reported (unfx) basis, ex-alc +14.3% YoY and incl.-alc +13.9%. On an FX-neutral basis, ex-alc +13.9% and incl.-alc +13.5%. Selling days in Jul were unchanged YoY.

Pricing: In the U.S., selective price increases are being negotiated with partners and customers, with implementation slated for Q4 2026. In EMEA, selective pricing was taken in some markets in Q2, with further actions planned across additional markets later this year.

Management reiterated that monthly and short-term sales are heavily influenced by selling days, day-of-week holiday timing, new product launch and promo cadence, and bottlers' production and inventory policies. These should not be extrapolated to the full quarter or any future period.

3. Revenue and gross profit this quarter

Total: Net sales were $2.54 bn, +20.2% YoY (vs. $2.11 bn a year ago), marking the first quarter above $2.5 bn. Ex-alc, net sales grew +20.8%.

FX: FX contributed a $48.5 mn tailwind to net sales this quarter. FX-neutral growth was +17.9%, and ex-alc +18.5% (ex-alc shown for illustration; the alc biz remains part of continuing ops).

By segment: Monster Energy Drinks $2.36 bn, +21.6% YoY (vs. $1.94 bn; FXN +19.3%). Strategic Brands $143.7 mn, +10.6% YoY (vs. $129.9 mn; FXN +8.1%). Alcohol brands $32.2 mn, -15.2% YoY (vs. $38.0 mn).

GPM: 55.9% vs. 55.7% a year ago. Adj. GPM ex-alc was 56.3% vs. 56.2%. Mix and pricing were positive, partially offset by higher aluminum can costs, regional sales mix, and higher freight.

Intl: Net sales ex-U.S. were $1.16 bn, +34.6% YoY, accounting for ~46% of total (vs. $864.2 mn and ~41%). On an FX-neutral basis, intl sales grew +29% to $1.11 bn.

4. Opex and profit this quarter

Distribution expenses were $118.8 mn (4.7% of net sales) vs. $82.0 mn (3.9%) a year ago, driven by higher freight and fuel. Selling expenses were $269.2 mn (10.6%) vs. $196.9 mn (9.3%), reflecting higher social/digital media and other marketing, including sponsorships and endorsements.

G&A was $291.2 mn (11.5%) vs. $265.9 mn (12.6%). SBC was $35.7 mn (vs. $33.2 mn), and included $6.5 mn related to digital transformation.

Total Opex was $679.2 mn (vs. $544.8 mn). Adj. Opex was $662.7 mn (vs. $505.6 mn).

OP was $740.4 mn, +17.2% YoY (vs. $631.6 mn). Adj. OP was $748.1 mn, +13.3% (vs. $660.1 mn). The effective tax rate was 23.9% vs. 24.4% a year ago.

Diluted EPS was $0.59, +19% YoY (vs. $0.50). Adj. diluted EPS was $0.60, +15.2% (vs. $0.52).

5. Cost outlook and other financial items

Tariffs and aluminum: Q2 tariffs and aluminum price increases had a limited impact on results, but tariffs significantly lifted the Midwest premium, raising can costs. Based on current aluminum prices and the premium, aluminum costs are expected to rise modestly QoQ at least through end-2026.

The company will continue to reflect tariff impacts via higher Midwest premiums and will maintain hedging where feasible. Under the current biz model, management does not expect existing tariffs to materially impact results.

Digital transformation: The enterprise platform modernization continues, including an upgrade to SAP S/4HANA. The planned go-live date is Jan 1, 2028.

IR: An investor day is planned in New York on Dec 1, 2026.

II. Call details

2.1 Management remarks

1. Global energy drink category

U.S.: For the 13 weeks ended Jul 25, 2026 (Nielsen), energy drinks including shots across convenience, grocery, drug, and mass channels grew +7.1% YoY. EMEA: In tracked markets, the latest reported 13 weeks grew +10.4% YoY (FXN).

APAC: Across Nielsen and Intage tracked channels, the latest reported 13 weeks grew +11.7% YoY (FXN). LatAm: In tracked markets, the three months ended Jun 30, 2026 grew +23.8% YoY (FXN).

Household penetration continues to rise, driven by functional benefits and lifestyle positioning. A broader, stickier product portfolio supports this, with both value and premium price tiers. Purchase frequency is increasing and use occasions are extending throughout the day.

Channels: The company will keep expanding in non-Nielsen channels, targeting FSOP as a major growth vector. Scanner data show consumer demand remains solid.

2. U.S. and Canada

Net sales grew +11.5% YoY. In Nielsen, the Monster family’s value share rose by 70 bps.

Zero/no-sugar offerings remain a key U.S. growth driver, with the Ultra family up +19% YoY in Nielsen. Full-sugar also contributed, led by the Juice Monster family at +26% YoY.

Innovation materially aided growth: staggered 2025 Q4 and 2026 spring launches. This was complemented by the U.S. 250th anniversary LTOs across Ultra, Juice, Monster Rain, and Bang.

The company accelerated sampling and marketing for Storm and Floats. Execution focused on distribution and merchandising, prioritizing high-velocity flavors and key pack sizes to broaden use occasions.

FSOP continued to make progress. The new alliance between Marriott and The Coca-Cola Company is expected to unlock substantial placement opportunities for Monster.

The innovation pipeline will be unveiled at NACS in Oct, consistent with prior practice.

3. EMEA

Net sales rose +27.2% YoY in USD and +22.2% FXN. Regional GPM was 38.8% vs. 36.1% a year ago.

In Nielsen, the company’s brand portfolio gained 220 bps of value share in the region. The category maintained double-digit growth, with Monster roughly growing at 2x the category.

Over the latest reported 30-week periods (country-specific), the company drove 46% of EMEA category value growth, with contributions from both core and innovation. Execution across markets, faster cooler deployment, and increased shelf space also supported growth.

No sugar: In Europe, the no-sugar segment continues to outgrow the category, where the company leads with 44.5% value share. In the latest 13 weeks (Nielsen), Monster no-sugar contributed 38% of category value growth.

Products: The company is scaling Juice Monster Viking Berry across EMEA. It launched Oscar limited editions for both Monster Energy and Zero Sugar, and a gold Lando Norris limited edition to celebrate the 2025 F1 World Champion, rolling into select EMEA markets from Jul.

Value tier: In Nielsen, value energy share increased in Egypt, Kenya, Morocco, and Nigeria. Bang Energy entered Greece in Q2 with a value positioning, after launching in Spain in Q1.

4. APAC

Net sales rose +35.7% YoY in USD and +36.7% FXN. Regional GPM was 41.4% vs. 41.0% a year ago.

Japan grew +14.5% in USD and +24.5% in local currency, supported by the agreement to supply Monster Energy Green into Coca-Cola Japan bottlers' own vending machines. Sales began in Jun with a strong start.

Korea declined -3.6% in USD and grew +0.6% in local currency, impacted by bottler inventory swings. Consumer offtake exceeded shipments this quarter, and the company remains No.1 in Korea.

China grew +62.5% in USD and +54% in local currency. India grew +84% in USD and +100.3% in local currency. Predator launched in Pakistan in Q2.

An additional data point (region unlabeled in the transcript): net sales +57.8% YoY in USD and +44.9% FXN, positioned between India/Pakistan and LatAm in the transcript layout. The company remains positive on APAC, prioritizing value brands in China and India.

5. LatAm and Caribbean

Net sales rose +56.1% YoY in USD and +40.4% FXN. Regional GPM was 46.2% vs. 45.2% a year ago.

Brazil grew +82% in USD and +61.6% in local currency. Mexico grew +29.5% in USD and +20.5% in local currency. Chile grew +26.3% in USD and +21% in local currency.

Argentina declined -25.6% in USD and -5.7% in local currency. As discussed previously, the operating model was adjusted to better manage FX exposure; shipments grew this quarter and the company remains the local share leader.

6. Monster Brewing (alcohol)

Segment net sales were $32.2 mn, -15.2% YoY.

7. Marketing and brand activity

Q2 selling expense rose primarily on marketing. The 2026 strategy is to increase spend across new platforms and partnerships, notably social and digital, while supporting core and innovation to recruit new consumers and lift household penetration.

U.S.: Through the UFC sponsorship, the company participated in the U.S. 250th anniversary campaign and launched the associated LTOs. Sponsored athletes took wins in Supercross 250, NHRA, Motocross, NASCAR, and X Games Sacramento, and its MotoGP riders won four races, including the Monster Energy Catalan GP.

Isle of Man TT: As a long-standing partner, the company celebrated Michael Dunlop’s three additional wins, taking his record to 36. The 2026 event also hosted a Hollywood production set around the race.

Music: The company sponsored Morgan Wallen’s The Problem Tour and activated at retail, where consumers could earn points redeemable for merch and tickets. It also ran large-scale activations at the StageCoach country music festival.

New partnership: It signed with the Big 12 Conference, securing naming rights for regular-season football and basketball. The co-branded logo will appear on jerseys, courts, and venues, with integrated digital and social channels.

2.2 Q&A

Q: Can you detail pricing by region, magnitude, and execution?

A: (U.S.) The company has pursued steady, annualized pricing over recent quarters and years, and believes the current model still drives volume. The aim is revenue growth outpacing volume, and profit outpacing revenue, which has worked for the company and retail partners.

Management views modest inflation as supportive for retail and will continue this approach. (EMEA) The global playbook is consistent, and EMEA has implemented low single-digit pricing as part of a long-term strategy to take opportunistic, periodic actions based on category structure and competitive dynamics by country.

Q: International growth accelerated this cycle (FXN +29% this quarter), with broad-based growth often ~2x category. What changed vs. prior cycles, and how sustainable is it given current share?

A: (EMEA) Similar to the U.S. and globally, double-digit category growth is driven by a strong value proposition and the brand plus functionality that make energy drinks relevant across dayparts and age groups. The company’s portfolio is over-indexed to these drivers and occasions, contributing 46% of EMEA category value growth.

Structurally, the company is outperforming the category, with 42% of growth from existing SKUs and products and 58% from innovation, whereas the category overall relies more on innovation. Collaboration with Coca-Cola bottlers continues to enhance availability, increase avg. SKUs per outlet, support scaled innovation, expand Monster-led energy sets, and accelerate cooler placements, lifting per-outlet productivity and share across markets.

No-sugar is another key factor: in Europe, no-sugar grew 23% vs. full-sugar at 5%, and no-sugar represented 63% of category growth. Monster contributed 61% of no-sugar growth and leads the segment with 44.5% share.

The portfolio remains balanced, offering consumer choice. Full-sugar still grew 10%, 2x its segment growth, while Ultra and the broader portfolio are bringing in young adults, women, and higher-consumption users. These elements underpin the growth story.

(LatAm and APAC) Multiple LatAm markets are very strong, with both sales and GPM up. Brazil stands out and is on track to become one of the company’s largest countries by sales.

The local team is executing well, in tight coordination with Coca-Cola bottlers, with significant cooler investment and important contributions from innovation. In APAC, large parts of the global population live in emerging and developing markets, creating a sizable opportunity; the company is opening multiple markets with close work alongside Coca-Cola bottlers.

India and China had been challenging for years, and recent progress in both has been meaningful.

Q: How does this year’s innovation differ from prior years? What did you learn from the U.S. 250th anniversary LTOs, and will this approach continue?

A: Innovation this year is sequenced in waves rather than concentrated in a single drop, improving execution quality. The LTOs were very successful, evident in Nielsen for each participant, with Ultra Red, White & Blue contributing 5% of sales since its national May launch.

Additional innovation arrives in fall 2026. A full 2027 innovation calendar will be showcased at NACS in Oct.

Q: Update on FLIRT, targeting female consumers, and expectations for the brand?

A: FLIRT remains early-stage, with marketing and distribution beginning only in Jun. The target audience is right, and the focus is on building repeat and laying the foundation.

An LTO is planned later this year and new products next year, to be presented at NACS. It is too early for conclusions, but the company remains committed.

Q: With broader category acceptance and a larger consumer base, what incremental low-penetration areas are opening up (e.g., FSOP or vending, smaller cans, female or health-oriented consumers)?

A: FSOP is a major opportunity, as discussed earlier. The Marriott opportunity is a joint effort with Coca-Cola, and the company looks forward to results.

A 12 oz pack has been introduced to broaden appeal, and Q2 saw stepped-up marketing to reach new consumers and increase household penetration. New entrants to the category skew differently than legacy consumers: Gen Z is over-indexed vs. other cohorts, women are driving incremental growth, and no-sugar accounts for 75%+ of category growth while the category continues to recruit.

Management believes household penetration has not peaked and sees ample runway. As a supplement, innovation is used as a recruitment tool; per the latest household panel, the company’s new-buyer recruitment is about 2x the category, with the category’s new-buyer mix at ~19%.

Innovation should both fuel the core and recruit consumers. Recruitment is viewed as critical to long-term success.

Q: How did you win the Marriott FSOP business jointly with Coca-Cola, and how has global key-account execution with the Coca-Cola system changed vs. a few years ago?

A: As previously noted, the company’s relationship with Coca-Cola’s new leadership is strong, and the outlook for collaboration is positive. There are many initiatives underway together.

The company’s offerings complement Coca-Cola’s, and many FSOP customers are now incorporating energy drinks into their portfolios. Management expects to continue working closely with The Coca-Cola Company and its bottlers to build a strong FSOP business.

Q: Per-case operating costs (incl. distribution and selling) stepped up in Q2. Any one-offs? What drove it, and is this a steady-state run rate or likely to recede?

A: Distribution costs were driven by freight and fuel, a pattern visible across many companies. The hope is for relief as geopolitical issues normalize, but the company must manage current pressures.

Second, the 2026 marketing strategy expanded assortment and messaging to better match evolving lifestyles and occasions. To reach broader and younger audiences, the company did several things not done historically, including launching a full Lando Norris SKU in Miami (F1-related), the Morgan Wallen tour, and a UFC event at the White House with associated costs.

In May, the company launched its largest campaign of the year, 'Beast for the next generation,' spanning CTV, programmatic, social, and retail media. The aim is to position Monster as the badge for consumers seeking energy with identity, culture, and style, featuring Gen Z athletes.

Q: How will aluminum inflation trend in 2H? Without broad-based global pricing, is confidence in protecting GPM improving due to easing inflation from peak, or mix from low/zero sugar?

A: The company is facing broad-based inflation, with distribution a significant swing factor as noted. On aluminum, part of the exposure is hedged using a ladder approach, staggering purchases over time rather than on a single day.

The Midwest premium spiked sharply in a very thin market. While the company hedged, in hindsight the protection was likely insufficient relative to today’s understanding, implying additional aluminum costs ahead that are expected to be modest but real.

Like peers, the company is exposed to inflation across raw and other materials, so cost pressures are likely to persist until conditions normalize. Aluminum and freight/fuel are also expected to remain elevated near term, and the company will continue evaluating pricing opportunities domestically and internationally, as seen with implemented and planned U.S. and EMEA actions.

On GPM, management aims to maximize dollars while recognizing the mix mechanics: international scale is positive, but carries lower percentage margins than the U.S., as discussed repeatedly. As management puts it, 'we bank dollars, not percentages.'

Overall, the company is satisfied with current trends and will strive to deliver the best achievable margin performance.

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