Dj Ceo Roper Sells 40000 Of Vita Coco Company Inc >Coco

Monster Beverage Corporation MNST delivered third-quarter 2024 results, wherein the top and bottom lines lagged the Zacks Consensus Estimate. While the bottom line declined year over year, the top line improved.

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Monster Beverage’s adjusted earnings of 40 cents per share missed the Zacks Consensus Estimate of 42 cents per share. The figure also declined 2.4% from 41 cents in the prior-year quarter.

Net sales of $1.88 billion grew 1.3% year over year but lagged the consensus estimate of $1.92 billion. Unfavorable currency translations hurt net sales by $62.8 million. Net sales rose 4.7% on a currency-adjusted basis and 5% excluding the Alcohol Brands unit.

Monster Beverage Corporation Price, Consensus and EPS Surprise

Monster Beverage Corporation price-consensus-eps-surprise-chart | Monster Beverage Corporation Quote

A Peek Into MNST’s Q3 Performance

Management highlighted that the energy drink category in the United States witnessed lower growth rates, in the convenience channel. However, the convenience channel showed signs of improvement in October. Outside of convenience stores, the category is expanding at a stronger pace across various retail channels. Nonetheless, the energy category grew globally and has demonstrated resilience.

Monster Beverage has been reviewing opportunities for price increases internationally. The company is making a roughly 5% price increase on its core brands and packages, effective Nov. 1, 2024, in the United States. For the fourth quarter, the company is continuing to monitor opportunities for further pricing actions in its international markets. It had a market share leadership in the energy drink category for its entire outlets combined in the United States for the 13 weeks ended Oct 26, 2024.

Per the Nielsen reports for the 13 weeks through Oct 26, 2024, for the company’s combined outlets, including convenience, grocery, drug, and mass merchandisers, sales in dollars in the energy drink category with energy shots rose 1.9% year over year. Its energy brands sales, including Bang, fell 0.6% in the 13-weeks. Monster’s sales were down 1.8%. Reign’s sales dipped 2.9%. While sales of NOS and Red Bull increased 2.9% and 5%, respectively, sales of Full Throttle declined 5.4%.

Net sales to customers outside the United States rose 3.6% to $760.1 million, representing about 40.4% of the total net sales. On a currency-adjusted basis, sales to customers outside the United States improved 12.1%.

Insights Into MNST’s Segmental Performance

Monster Energy Drinks: Sales of this segment, which includes Monster Energy drinks, Reign Total Body Fuel high-performance energy drinks, Reign Storm total wellness energy drinks, and Bang Energy drinks, rose 0.8% to $1.72 billion. The segment’s sales included a negative impact of $52.8 million from adverse currency rates. On a currency-adjusted basis, net sales for the segment rose 3.9%.

Strategic Brands: In addition to the affordable energy drink brands, the segment includes a range of energy drink brands acquired from Coca-Cola as well as the Company’s affordable energy brands Predator and Fury. The segment’s net sales grew 14% year over year to $112.6 million. Currency headwinds hurt sales by $10 million. On a currency-adjusted basis, net sales for the segment rose 24.1%.

Alcohol Brands: Net sales for the segment, which includes The Beast Unleashed, Nasty Beast Hard Tea, and several craft beers and hard seltzers, fell 6% year over year to $39.8 million, due to the soft sales volume of craft beers.

Other: Net sales for the segment, which includes some products of American Fruits & Flavors sold to independent third parties (AFF Third-Party Products), dipped 11.5% year over year to $5.9 million.

Analysis of MNST’s Costs & Margins

The cost of sales was $881.2 million, up 1% year over year. The company’s gross margin expanded 20 basis points (bps) year over year to 53.2%. However, excluding the impact of Alcohol Brands Inventory Reserves, the gross margin for the third quarter was 53.7%. The Alcohol Brands Inventory Reserves affected gross profit, while the margin increase was driven by pricing actions, lower freight-in costs, and Bang Inventory Step-Up, somewhat offset by higher promotional allowances for the Bang Energy and Alcohol Brands Inventory Reserves.

Operating expenses grew 9.9% year over year to $519.9 million, due to higher costs associated with sponsorships and endorsements, increased payroll expenses, and expenses related to intellectual property claims. The expenses were impacted by a $16.7 million provision and $1.2 million in legal expenses referred to as Hansen Expenses. As a percentage of sales, operating expenses expanded 210 bps to 27.6%.

Selling expenses, as a percentage of net sales, increased 90 bps year over year to 10.4%. Distribution costs, as a percentage of net sales, fell 20 bps to 4.4%. General and administrative expenses, as a percentage of net sales, jumped 150 bps year over year to 12.8%.

MNST’s Financial Health

This Zacks Rank #3 (Hold) company ended the third quarter with cash and cash equivalents of $1.6 billion, and total stockholders' equity of $5.8 billion.

In third-quarter 2024, Monster Beverage repurchased 11.3 million shares for an average price of $47.32 per share, amounting to $534.7 million. As of Nov. 6, 2024, roughly $500 million was available for repurchase under its earlier authorized repurchase program.

Shares of this Zacks Rank #3 (Hold) company have gained 21.6% in the past three months compared with the industry’s decline of 3.8%.

Three Stocks Looking Good

We highlighted some better-ranked stocks from the broader Consumer Staples space, namely Ingredion INGR, Vital Farms VITL, and Vita Coco Company COCO.

Ingredion is a solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. It currently sports a Zacks Rank #1 (Strong Buy). INGR has a trailing four-quarter earnings surprise of 9.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate Ingredion’s current financial-year EPS indicates growth of 12.5% from the year-ago reported numbers.

Vital Farms offers a range of produced pasture-raised foods. It presently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 82.5%, on average.

The Zacks Consensus Estimate Vital Farms’ current financial-year sales and EPS indicates growth of 27% and 88.1%, respectively, from the year-ago reported numbers. The consensus mark for VITL’s EPS has been unchanged in the past 30 days.

Vita Coco develops, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. The company currently has a Zacks Rank of 2. COCO has a trailing four-quarter earnings surprise of 17.6%, on average.

The Zacks Consensus Estimate for COCO’s current financial-year sales and earnings suggests growth of 3.5% and 29.7%, respectively, from the year-ago reported figures.

Zacks Investment Research

Molson Coors Beverage Company TAP has posted third-quarter 2024 results, wherein the top and bottom lines beat the Zacks Consensus Estimate but declined year over year. The results were largely affected by the challenging U.S. macroeconomic environment, the anticipated unfavorable shipment timing and the wind-down of a contract brewing agreement, causing a 17.9% year-over-year decline in U.S. financial volume. This was partly offset by the strong performance of the EMEA&APAC business and robust results in Canada within the Americas segment.

The company’s adjusted earnings of $1.80 per share fell 6.2% year over year but surpassed the Zacks Consensus Estimate of $1.65.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales declined 7.8% year over year on both reported and constant-currency basis to $3.04 billion but beat the Zacks Consensus Estimate of $3.14 billion. The decline was led by a lower financial volume, partly offset by an improved price and sales mix.

Shares of Molson Coors fell 1% in the pre-market trading session on Nov. 7, 2024, backed by year-over-year declines in sales and earnings per share (EPS) in third-quarter 2024 and a lowered sales view for 2024. The Zacks Rank #3 (Hold) company has gained 6.9% in the past three months against the industry’s 1.7% decline.

For those looking to find strong Consumer Staples stocks, it is prudent to search for companies in the group that are outperforming their peers. Vita Coco Company, Inc. (COCO) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Consumer Staples peers, we might be able to answer that question.

Vita Coco Company, Inc. is one of 184 individual stocks in the Consumer Staples sector. Collectively, these companies sit at #13 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Vita Coco Company, Inc. is currently sporting a Zacks Rank of #2 (Buy).

Within the past quarter, the Zacks Consensus Estimate for COCO's full-year earnings has moved 4.9% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Based on the most recent data, COCO has returned 34.9% so far this year. Meanwhile, the Consumer Staples sector has returned an average of 3.6% on a year-to-date basis. As we can see, Vita Coco Company, Inc. is performing better than its sector in the calendar year.

One other Consumer Staples stock that has outperformed the sector so far this year is Pilgrim's Pride (PPC). The stock is up 85.3% year-to-date.

For Pilgrim's Pride, the consensus EPS estimate for the current year has increased 8.8% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Breaking things down more, Vita Coco Company, Inc. is a member of the Beverages - Soft drinks industry, which includes 14 individual companies and currently sits at #67 in the Zacks Industry Rank. Stocks in this group have gained about 2.1% so far this year, so COCO is performing better this group in terms of year-to-date returns.

On the other hand, Pilgrim's Pride belongs to the Food - Meat Products industry. This 4-stock industry is currently ranked #97. The industry has moved +14.3% year to date.

Investors with an interest in Consumer Staples stocks should continue to track Vita Coco Company, Inc. and Pilgrim's Pride. These stocks will be looking to continue their solid performance.

Zacks Investment Research

Shares of Vita Coco Company, Inc. (COCO) have been strong performers lately, with the stock up 24.6% over the past month. The stock hit a new 52-week high of $35.78 in the previous session. Vita Coco Company, Inc. has gained 34.9% since the start of the year compared to the 3.6% move for the Zacks Consumer Staples sector and the 2.1% return for the Zacks Beverages - Soft drinks industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Vita Coco Company reported EPS of $0.32 versus consensus estimate of $0.27 while it missed the consensus revenue estimate by 2.09%.

For the current fiscal year, Vita Coco Company is expected to post earnings of $0.96 per share on $511.06 million in revenues. This represents a 29.73% change in EPS on a 3.53% change in revenues. For the next fiscal year, the company is expected to earn $1.14 per share on $568.95 million in revenues. This represents a year-over-year change of 18.58% and 11.33%, respectively.

Valuation Metrics

Vita Coco Company may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Vita Coco Company has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 35.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.8X. On a trailing cash flow basis, the stock currently trades at 44.6X versus its peer group's average of 15.1X. Additionally, the stock has a PEG ratio of 2.51. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Vita Coco Company currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Vita Coco Company fits the bill. Thus, it seems as though Vita Coco Company shares could have potential in the weeks and months to come.

Zacks Investment Research