US: Monster Beverage's earnings miss not a long-term concern - analyst
Monster's miss on Q2 earnings estimates was down to a slow June, but its ability to grow internationally remains "substantial", according to an analyst.
The California-based energy drinks group reported a sharp rise in net profits and sales yesterday. However, its share price took a hit in after hours trading, down by 19% to US$55.38 per share, as it missed estimates for sales growth.
But analysts Stifel Nicolaus said it believes the dip is "more a function of timing than materially slowing end-demand".
Another reason, it suggested, was due to "product damage associated with the roll-out into Japan and Korea, that will normalise in time".
In international markets, Monsters performed well in Q2 as sales rose by 50% to $153.4m. Stifel Nicolaus was encouraged by this. "We believe the runway for international growth is substantial, as Red Bull’s 2011 non-US sales were 15x Monster’s international sales and growing double-digits more than 20 years after the product’s introduction," it said.
The note added: "While Monster's shares are likely to be pressured near term, given concerns regarding slowing sales growth, we continue to believe the company can achieve a mid-teens sales CAGR through 2015, resulting from continued US share gains, innovation, and international expansion."
As we welcome in the new year, we invite Euromonitor to cast its eye over what 2013 holds for the drinks industry. In the first part of this month's management briefing, the global market research and...
- Are we kidding ourselves over craft spirits?
- Is Brown-Forman doing a Jack Daniel's in Ireland?
- Is Brown-Forman at the end of the SoCo road?
- What's behind Brown-Forman's Irish whiskey plans?
- Interview - Heineken global activation director
- Diageo, Treasury Wine Estates quiet on wine sale
- Diageo secures Xerox Corp CFO as finance head
- Tesco pulls several Carlsberg SKUs in UK
- Scotch whisky sees sales turn corner - SWA head
- Former Pernod Ricard exec joins Wakefield Wines
- The IWSR Duty Free/Travel Retail Summary Report 2015
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research