Monster released its Q1 results yesterday

Monster released its Q1 results yesterday

A cutback on international promotions and sponsorships has helped return Monster Beverage Corp to profits growth, its CEO has said.

In a call with analysts after the release of the company's Q1 results yesterday (8 May), Rodney Sacks said the energy drinks maker has “taken to operate more leanly overseas” as it trims selling expenses. “We are getting positive profits from Europe now and we believe we will continue that going forward,” Sacks said.

Monster posted a 50% increase in Q1 net profits yesterday as sales climbed by 11%. The profits performance was a return to growth after a flat full-year.

Sacks said better margins in the US also boosted profits, with sales of the higher-margin Ultra range being “very successful”. “The Ultra line cost-wise has a lower cost of goods than some of the other lines, particularly lines like the juice lines or any of the java lines or Muscle Monster lines. So, when you weigh the numbers, clearly that has helped our margins,” Sacks said.

Meanwhile, Sacks cited new Nielsen figures for the 13 weeks to 26 April that showed US energy drink sales increased by 6.8% over the same period a year ago.

In the period, sales of Monster grew 15% while sales of Red Bull were up by 4%. Sales of Rockstar increased by 4.7%, and sales of 5-Hour decreased by 3.2%. Sales of AMP, however, were down 12.3%, while NOS increased sales by 26.3% and Full Throttle rose 5.7%.

Sacks said: “What is important to us ultimately is the trends that you see from the Nielsens, which are really showing consumer demand at the retail level.”