US: Monster Beverage sees Q3 sales up, but YTD profits down
- Nine-month net profits fall 3.5% to US$262.6m
- YTD net sales sales up 7.3% to $1.7bn
- Operating profits flat at $438.2m
- Company gets regulatory approval to launch in India
The company is still grappling with regulatory and litigation issues
Monster Beverage Corp's net profits continue to struggle, despite a rise in year-to-date sales, as regulatory and litigation costs take their toll.
Net profits in the nine months of the end of September fell by 3.5% to US$262.6m, the California-headquartered group said late yesterday (7 November). Sales in the period were up by 7.3% to $1.7bn, while operating profits were flat at $438.2m.
In Q3, net profits rose by 7% to $92.2m, as sales increased by 8.9% to $590.4m. Operating profits in the three months were up by 7.6% to $151.4m.
During the third quarter, Monster said it incurred cost of $5.3m relating to “regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale” of its energy drinks.
The company has been under the spotlight on a number of fronts around the safety of its products. The US Food and Drug Administration (FDA) is currently investigating the safety of caffeine in food products, while Monster is also locked in a court room fight with San Francisco's attorney general, Dennis Herrera. The company is also awaiting the final outcome of a lawsuit over the safety and marketing of its products.
"We reiterate that our energy drinks are safe, based on both our and the industry's long track record and the scientific evidence supporting the safety of our ingredients,” said CEO & president Rodney Sacks.
Meanwhile, the company confirmed that it received regulatory approval to sell its drinks in India last month, after an earlier delay.
Shares in Monster yesterday closed down 1.2% at $57.11.
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