Despite the ongoing impact of the COVID-19 pandemic, Monster Beverage Corp. (Nasdaq: MNST) said its net sales increased 13.2% to $1.41 billion during its 2021 third quarter, ended Sep. 30, up from $1.25 billion in the same period last year.
Net sales for the company’s Monster Energy Drinks segment which primarily includes Monster Energy drinks, Reign Total Body Fuel high-performance energy drinks and True North Pure Energy Seltzers, increased 14.3%t to $1.33 billion in the third quarter, from $1.16 billion for the 2020 third quarter.
Net sales for the company’s strategic brands segment, which primarily includes the various energy drink brands acquired from Coca-Cola Co., as well as its affordable energy brands, increased 0.2% to $74.4 million for the 2021 third quarter, from $74.3 million in the 2020 third quarter. Shortages of NOS concentrate negatively impacted net sales.
Net sales for the company’s "other" segment, which includes certain products of American Fruits and Flavors LLC, a wholly owned subsidiary of the Monster Beverage Corp., sold to independent third-party customers decreased to $6.3 million for the 2021 third quarter, from $8.6 million in the 2020 third quarter.
Net sales to customers outside the United States increased 18.7% to $527.4 million in the 2021 third quarter, from $444.5 million in the 2020 third quarter.
Gross profit, as a percentage of net sales, for the 2021 third quarter was 55.9%, compared with 59.1% in the 2020 third quarter. The decrease in gross profit as a percentage of net sales for the 2021 third quarter was primarily the result of increased aluminum can costs, attributable to higher aluminum commodity pricing, as well as the cost of importing aluminum cans, logistical costs and geographical sales mix.
During the 2021 third quarter, the company procured additional quantities of aluminum cans from suppliers in the U.S., South America and Asia in response to increased consumer demand. However, the company said it continued to experience shortages in its aluminum can requirements in the U.S. and EMEA during the recent third quarter.
In addition, Monster continued to experience additional supply chain challenges, including freight inefficiencies, trucking unavailability, shortages of shipping containers, port of entry congestion, insufficient co-packing capacity and delays in the receipt of certain ingredients – in the United States and EMEA. As a result, the company said was not able to fully satisfy increased demand for its products in these regions in the 2021 third quarter.