Monster Beverage (MNST) 4 Aug 202020 Q2 Earnings call transcript

Good day, and welcome to the Monster Beverage Company Second Quarter 2020 Conference Call. All participants will be in a listen-only mode [Operator Instructions]. After today's presentation there will be an opportunity to ask questions [Operator Instructions] I would now like to turn the conference over to Mr. Rodney Sacks, Chairman and CEO. Please go ahead sir.

gentlemen. and ladies afternoon, Good Thank you call. attending this for I Sacks. am Rodney Vice and Schlosberg, Executive on Finance. the Hilton Vice is of our call Chairman Kelly, President our Tom as President is our announcement. read now will Kelly Tom cautionary

for to of the XX, a any company like to that call and otherwise. new may most Section Section August as and to and from our risk future result our cautions based this certain forward-looking XXXX XXA filings and designated currently forward-looking results expectations sales of explanation events on entitled statements non-GAAP Before which and assumes the we Act risks call, as impact May the provided constitute statements, our condensed the forward-looking begin, also and Rodney with remind available available that and Securities Act the on contained made XXXX no to our statements may that are quarterly A the including affect meaning knowledge certain control these current information the risks during on discussion notes profitability, to within operations. February to of our Exchange may consolidated Management with section. Report of are COVID-XX the statements as events, on company the regarding filed gross well information of uncertainties amended call. performance. and management the filed Securities refer would call and the and business, of on An company's Financial Sections Securities future recent Exchange over actual the XXE on information, factors listeners or this in the statements of of whether including subject The on Commission, forward-looking that during course update Form on of obligation specific release asterisks revenues, XXXX, the www.monsterbevcorp.com are during XXXX. of statements expectations and which cause the Please of hand are Annual outside amended of expenditures, respect statements XX, trends, Form pandemic and XX-K and XXXX report Information recent on materially this with XX-Q a dated and most the attached is I copy to many earnings Sacks. of X, of now future based differ to uncertainties, this the I'd as our future financial as in of measure site, the like to business certain in income maybe made performance mentioned Web other information therein is the

me health, well by have stating been that Let been being has the thoughts pandemic, the who priority begin employees. the prayers by our From and pandemic. our our impacted the top COVID-XX safety all are of beginning of and with COVID-XX

XXXX, March we global employees work able home remotely. for As from implemented policies work previous early are our restrictions on to in travel mentioned call and who

guidance work For which adopted precautions health who instituted, were safety consultants. unable from those professional developed line been remotely and are have in employees and authorities with to public

our to the the subject retailers in bottlers, distributors field have field in in operating our teams States protocols. reopened with United and partially offices Our and are sales certain safety countries and

distributors and We chain. world bottlers are proud our ensuring by integrity around and employees, incredibly co-packers of exhibited the the supply are of the who teamwork our

part of distributors and net levels. XXXX certain the available modifications distributors The reducing their gross quarter, been generally have for and to sales levels. Certain affected. of and products inventory countries, facilities their in our distributors, our our pandemic shipment service the operations our to and bottlers are an But second flavor have implemented impact facilities manufacturing had bottlers limited points our on are due Our COVID-XX co-packers, to more remain of operating. adverse and and coal bottlers consumers. warehouses In all

However, and in we latter in channel in and as configurations, XXXX, has including a sequential in quarter, improvement home reopen. began certain of half increase did the a sales the immediate countries company package an consumption. see and preferences a seen in consumer decrease gradually at mid-March consumption states to the shift Since

gas in sales initially sequentially quarter. in as channel, which were a of in convenience improved is the and channel, our adversely affected largest the Our the traffic second result but decrease foot quarter a throughout

pandemic. do and our bottlers of not to ecommerce, on store, we impact material food our co-packers increase a and Currently, distributors remains and of channel our ability and is which while in our the merchandiser, for business COVID-XX mass grocery service to foresee the quarter us to products challenged. as related small result Our clubs manufacture business a the a on-premise continue distribute

of or XXXX workers, decreased a a we arm in channel. the including Reign, outlets to share be In particular, including we down points period increased to dollars. X.X the four in weeks Guard. energy X.X%; shots same down in increased impact decreased over includes declined over at of or X.X% COVID-XX by and Rockstar through XX.X was X.X%; increased $X.XX on from channels XX.X%, to to $X.XX been increased energy quarter and comparable X.X%, of XX.X% XXX% future X.X%. second ended the sales VPX Reign and sponsorship XXX.X% previous our expenses due and for same in to period X.X the X%. the Sales Adjusting the points Celsius sales points XX.X%. According point the points are June share weeks and sales in X.X the channel shots same which Rockstar company's income dollars XXX.X% points of Java the Sales increased decreased Reign ended versus Full was its down same have the point Canada convenience drink Monster outlets our XXX.X and X.X% share Monster's in share Red share movements XXXX of X.X such convenience year. grocery, share and share of to year. XX.X%. sales Monster future remained market the in XXXX have XX.X% for part do quarter to XX.X%. of percent. in Bull combined sales we ended in X.X deferred Keto to In sales According costs maybe points decreased sales X.X%. of same are million to XX, July week quarter from share XX.X% Bang July the VPX to share philanthropic Nielsen company's EMEA period and the second the drink larger quarter. XX.X%; points. XXXX. Monster liquidity. EMEA previous in revenue market year energy XX.X% points which pronounced Shot, versus NOS to with declined expect market to X.X by million the X.X%, million. for ended was its X.X four Reign XX.X% X.X%. for increased share energy for XXXX, Bull income Starbucks by United brands Energy share the X.X%; share sales four X.X% The as more X.X According significant to compared category July points four period been a period up million, period ago. per gas postponed for decreased X.X% XXX category were XX.X% dollars its to point increased weeks shots brands Nielsen XX were of any XX Java sponsorship was decreased its quarter United for higher X.X% X.X% X.X%, Throttle sales in was namely as all products its to including energy market the X.X share higher. points in experienced X.X% sales second category in for to to Double quarter decreased our energy points the the share of the which and X.X%; the to pandemic, sales was decreased and and in previous gas primarily point the same as share in donating all plus decreased the Due Rockstar ended XX.X. Shot the increased in second drink June share coffee shots and was material a experiencing the endorsement individuals in the States. Nielsen the channel, and sales July surrounding Monster, material information, increased tracks XXXX, share in company's costs increased Diluted X.X XX Amp weeks XXXX, weeks discontinued gas front the NOS's includes and of XXXX. its X.X% States X.X lower increased hospitals brands, category, billion of market of countries engaged Bang increased of responders, for Operating drink Coffee sales share increased company's year. drug, in coffee monster Full the Sales the in uncertainty reports point Starbucks including week sales periods same decreased points first on its revenue Red points the Java the energy XXXX during X.X XX.X% Monster raw our week period compared share Full The the XXXX X.X rescheduled unable decreased the second in Sales of to of the dollars XX.X%; brands X% chain. X-Hour philanthropic Cafe Monster plus Sales continues or Cares, of the period XX, actively of was previous XX%. ago. The Espresso up to in X-Hour share and According sales Full previous year. sales up COVID-XX if as Sales which of increased drink by XX.X%, share X.X drink dollars down X-Hour in a XX.X%. Sales and Sales share share month category energy the the brands to of sales Bull increased lower X.X%; Java over million, XX, of ago. in X.X%, Nielsen up energy while for XX.X% energy energy decreased previous generating channel in billion the in for was as Throttle the Bulls pandemic Monster same to increased second share Bull of share four July in in share the X.X endorsement same to from addition, XXXX, X in Monster decreased segment Triple the a X.X% and reduction increased cost to including Roasted be foreign Rockstar over dollars, currency and pandemic's period to According NOS's finished to was Net all Reign sales down deferred and ending convenience Nielsen a to shortages energy year. Red In to convenience which XXXX. include strategic line certain up the Monster Throttle and lockdowns. the of efforts, share major sales Amazon XX the available XX.X%; drink by a were and XX, Amp [ph] the Based was lines, X.X%. category, and [Group] over period. were X.X%, in sales of X.X earnings Amazon, X.X a the Nielsen Red and company's was four events of the year versus X.X estimate periods. Red sales energy to Java X.X%. X-Hour VPX currently Bang year; point. was point versus the X.X% quarter. were category period versus X.X approximately According previous of sales travel sales including share point weeks XXX, of XXXX. merchandisers, XX.X% of was increased Rockstar XXX.X year XX, up million share to Monster X.X%. $X.XX was XX.X% share for its XX, COVID-XX The the sales the and our XXX.X sales not would decreased the increased the decreased as Mexico, down recognized. same decreased the quarter its its X.X%; X.X% up energy and share increased and up Sales of energy will net National increased $X.X for XX.X itself was X.X% energy year such in supply XX.X%, sales to Amp and Bang at of X.X% NOS gas Reign increased X.X XXXX, have market XXX% Starbucks was According XXXX, in product of well increased July XX% were up X.X% energy declined Throttle XX.X% Rockstar combined, X.X% a mass of by Stackline, in a in of energy XX.X%; Monster working XX.X% impact increased extended points a up XX.X%. X.X% been decreased X.X%; not the was increased increased number the by on have X.X drink our X.X%. Bang lower were a the market the healthcare of in entertainment convenience, Monster

market against decreased Our discontinued decreased value the Mexico; X.X decreased Vive to share X market XX.X% points previous and XX.X%. increased by points to year. and and X.X%. share X.X has in to The period of comparable XX.X% its increased decreased market a sales sales Burn points the share points in share been X.X Volts to by XX.X%. decreased XX.X% sales Red share Bull percent X.X XXX its its market

to Argentina. drink in often a be EMEA Mexico. to that turn, statistics Nielsen in XXXX. materially energy's that a to [Indiscernible] a was Nielsen single its of I launch should XX.X. period the months, June positively volume of for June Monster in period reported in a XX.X% Republic to impact to XX.X% to XX.X% which promotions and to as Nielsen XX.X% of XXXX the to period share share increase, Coca-Cola from market Britain; in from Monster's and as same value to market convenience in convenience is Since in Africa, XX.X% increased one Poland, the in Netherlands. XX.X% of the read because in point. X.X from X.X%. XX.X% grew market Monster's France; guide which market compared OXXO XX.X% and X.X%. which According the to in Nielsen XX.X% to on share X.X% Boost quarter in Belgium; influenced be country Australia, the may energy to market value from dominates XX.X% from numbers by increased energy XX.X% decreased in materially be launched to XXXX. be to from to to by previous According to in sales to particular from X.X share the the for ended EMEA XX% from Nielsen undertaken XX.X% the at point in numbers Norway; Great OXXO XX.X% in declined while in mid-June X.X year short channel monthly from Predator as market to in to XX.X% is of and XX.X% March While from is brands and/or EMEA Argentina grew compared be to from in Czech weeks and grew XX.X% the four in year brand percentage more retail EMEA channels of sales grew flat and guide from to Nielsen is to in XX.X% a dates in end the May in July market. cover country Italy. chain the varying Germany XX.X% Monsters used to significant in in in the XX-week period remained XX.X% in According increased to month achieved share that grew chain from negatively vary sales referred Sweden, because in to XX.X% market share the Nielsen increased XX.X% of XXXX, Nielsen XXX% in the to in IRI value it X.X% and in from by The X.X% XX.X% XX.X% X, compared XX.X%; grew country in to retail only The XX.X%. XX.X% within but for could Denmark; South from to According Sales statistics its to or from the by influenced from in on XX% XX.X% Energy country. XXXX the can Mexico subjectivities market of chain, month. Argentina country points same XX.X% the may point chain the sharing Spain; declined and increased from was XXXX, the ended Monster the Brazil by Monster's the in out in first value are Ireland; read Republic, Consequently, vary previous a country. retail like from for to leading XX.X%. XXXX, would used XX.X%; to month that in have now XX.X% to period the XX.X% from only Nielsen XX-week XX.X% grew a Chile from during should

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temporary group which on the adverse for Coca-Cola In the the Monster ended European June impact trading XXXX. itself addition, three delisting resulted months and in of to some XX, Western in EMEA extent, in between Coca-Cola the had buying products, and lesser dispute a an bottlers primarily Europe

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you. Thank

will question Instructions] Please begin today's Andrea JPMorgan. session. Teixeira now [Operator We go the from with ahead. first And question-and-answer comes

Congrats on the results.

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Thank you.

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Peter Our America. ahead. Galbo of Please from of go next question today Bank comes

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focused comes it down time; think this own system. during And they period of distribution very I their have and managed Red personnel. Bull to really dedicated

I the in the in smaller in markets, think when the of and back, their step their with active being big market most convenience companies and points core and cetera took field independent. a personnel particularly gas, the and et

that well their to as probably the took literally their when handle as at only together companies adjust focus that approach you promoting. believe and bigger had and the they COVID the pandemic, and trying company looked to all and situation. do teams is in that was think employees Bull that the and didn't the And protecting I'll combine actually their pedal foot field, merchandising Red I that their company, the has off step with have introduction product difference. fact it, we the system really they real did executed I given really Coke did. and they where them really bigger that think has flavor well a that been think it But just a companies what are most resonated consumer together the with of That's as things the was it other that those and back the like boost.

will are think reversing into and field. getting back the they that I start that

out Now field. the into getting we're

of a the including innovation Hilton We half also be we got for the pulled something I in the some the reasons. some will that's what big that of We've launching got really to this our response and weeks. team product up next has said. few understand one We've watermelon and year, lined second out as been that think within of

Thank you.

Our next today question ahead. Grandet comes go from Please Guggenheim. with Laurent

we convenience reset you mean your for were you; mean make spoke that mentioned new mean, specifically retailers mean clear So last time for because There you I I the I summer. for the that mean and implement sure store COVID-XX, I of then was a focus retailers innovation. to to most able [indiscernible] part I

the retailers gain to I shelf their curious, I space mean, just did summer that a late additional know mean, So convert it's either any was category all the they performance shelf. and some retailers, reset for mean, in the energy, or energy I shelves? your I them retailers convenience the because of to store I mean there And need are larger but all in in delays. and/or COVID-XX you

So want to have taken you Thanks. these.

by retailers the of lot merchandised A bottlers. are the

the the at the of was though space the they resets. got allocated, product start even not have So merchandise to may

a pandemic April far we if the of when grown continuing it the channel at the from I and where all part bottlers has learn has where working where getting that So hands now, started. And and to think early as they're were at -- and we're And in where cry allocated to look space this convenience March in away in back was just are off. innovation were it's is all that been you our mentioned, we the contractually I the guys the with of that ensure of grow, field. how from get

all was work and being we don't to back in is that progress. everything a point really got line think But said, I everything I think a say it's that it achieved. that where was that, could planned we've -- is in

we being but go we of because the as the all improving the and through it's slow, But see is I still think hopefully it's But being it's we because just next difficulties done, months. a out effort, cycle time. would not still will continue slower like improve generally. I of few it's to it. to where faced, think It is it's it

the teams working distribution on actual the part, Yes. but shelves Sets most are are physical on on. our distribution the for the products it's that done field the sets of

final the like And this Sacks Rodney turn his to I'd concludes over to back remarks. question-and-answer for the Mr. session. call

of interest you. for Monster, Thank continued like everyone in On thank to the behalf I'd their company.

of itself hope our the attendance. and pandemic energy and unfortunate COVID-XX growth the distant resolve that our to to system expand And continue positioned you the will are we challenges that company believe and for differentiate products both and committed will of through We and abroad. very as navigate able our that and develop Coca-Cola drink be and continue to safe We the your stay Thank drink energy continuing home remain brands. to in in of that result the and healthy. to in believe we future. internationally. you bottler too particular, this situation category the expand not hope in portfolio about to our much We innovate, the optimistic ahead total a believe We company be will well strategy brands through distribution at

conference call. concludes Thank today's sir. This you,

You a may lines now disconnect have day. your and wonderful