Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you provide more details on the drivers behind the gross margin expansion in the quarter? How did the price increase on November 1 impact this, and what about the production of some of your volume in-house? Also, how do you view the risk from aluminum tariffs, and are you still hedged on aluminum? A: The major drivers of gross margin expansion were reduced input costs, partially offset by geographical sales mix. The price increase positively impacted gross margin, but was countered by increased commissions to Coca-Cola and higher promotional allowances to prevent consumer sticker shock. Regarding tariffs, it's premature to predict their impact, but we are well-hedged on aluminum for 2025.
Q: Can you provide insights on Monster's potential US market share performance and the innovation pipeline for 2025? A: We have negotiated increased shelf space in the low single digits, which is promising for our portfolio additions. The US energy drink category is substantial, and while competition remains, we are optimistic about growth. Our innovation pipeline for 2025 is robust, with early launches like Ultra Blue Hawaiian performing well. We are also focusing on our Bang and Reign brands, expecting positive outcomes from our strategic initiatives.
Q: How is the untracked portion of your business performing, particularly in smaller stores and among the Hispanic population? A: The spending behavior of consumers, particularly in smaller stores, has been affected by weather conditions. January sales were impacted by severe weather, but recent weeks show positive growth trends. It's important to note that Nielsen data reflects consumer purchases at retail, not our sales to bottlers, which can cause discrepancies.
Q: Can you elaborate on your plans for innovation in the functional segment, particularly with Bang and Reign? How do you view the recent acquisition of a competitor in this space? A: Bang and Reign have distinct market positions, with Reign focusing more on performance. We believe each brand can find its niche. The acquisition of a competitor is not directly comparable to our brands, and we remain confident in our strategies and innovation pipeline for 2025.
Q: What factors are you considering for potential additional pricing increases? A: We continuously evaluate opportunities for price increases, considering factors like cost increases, tariffs, and competitor actions. While we aim to improve shareholder value, we won't increase prices unnecessarily. Opportunities exist, especially for brands like Rainstorm and Bang, which didn't see price increases in November.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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