Monster Beverage (MNST) 4 May 232023 Q1 Earnings call transcript

Good afternoon, and welcome to the Monster Beverage Corporation First Quarter 2023 Financial Results 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. Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Mr. Schlosberg, Monster Hilton and Sacks Co-CEOs Beverage. of Rodney go ahead. Please

our much. Thank I'm and Schlosberg, is Co-Chief Tom Good Officer. call; gentlemen. Chief on very Officer, Rodney Chairman is Executive Thank Hilton Kelly, call. ladies as this afternoon, you the and attending you Sacks. Financial our Vice for

Tom Kelly cautionary our will statement. now read

the XXE business, with future amended, information respect of the on Exchange regarding constitute of are available listeners made profitability, during revenues, statements future Act Securities we I forward-looking within as events, as Act of Section Before statements currently management certain amended begin, to of would and financial that like Section XXXX the the performance XXXX of meaning of expectations call Securities trends. to may XXA remind and this based and

cautions knowledge current materially may risks are forward-looking on made company of this these and to during from statements statements uncertainties, the expectations outside many Management are certain based to differ subject which actual results of control and are our the that the cause call. and that

discussion Please entitled most annual events the future on refer and XX-K the update forward-looking information, statements, with any XXXX, uncertainties a that Form a X, on company Risk therein recent to Factors obligations filed of March may otherwise. on new and and for specific sections risk The whether report Statements, including no affect our Commission, contained to including assumes performance. filings or result as Exchange our our Securities Forward-Looking

Sacks. Rodney hand now like to to would over I call the

you, Thank Tom.

higher in net XXXX of comparable on sales and the first XX.X% foreign basis. sales quarter of The quarter, company record first billion X.X adjusted billion currency achieved in a higher period, XXXX X.XX the than XX.X% net

in of was the decreased sales and profit percentage increase XXXX can of for a the percentage first pricing quarter first comparative compared was quarter result XX.X% to a XXXX net the with aluminum freight as Gross The primarily costs. in quarter of for sales gross first costs, first as the decreased compared net XX.X% in XXXX as profit quarter. the XXXX actions,

a remaining third and the but to XX.X% quarter, Gross in in of as gross quarters in quarter, quarter. the increased first the of net and in increased on from percentage XXXX from quarterly basis in the over the to the alcohol XX.X% XX.X% quarter, first a sequential company's segment quarter. XXXX will imported fourth profit XXXX depletion in The fully utilized percentage the on net XXXX of few basis excluding quarterly XXXX XXXX sequential during a quarter, XXXX. XX.X% next XX.X% a can the our inventories profit Gross be fourth sales continue sales, cost profit for should higher XX.X% brands as third

Operating expenses in for quarter. to quarter first the million, first million XXX.X the XXXX were compared XXX.X XXXX

to product expenses increased increase of States The EMEA. United and expenses. to expenses higher due higher primarily as of globally. due finished XX.X the million raw expenses to aluminum to percentage quarter. purchasing X.X% of million now in As million first The X.X primarily materials partially other sales quarter, sources inventories million operating Distribution XXXX sales, first compared by result in XX.X warehouse expenses the or XX.X% expenses XXXX sales, net the X.X% cans was first distribution payroll XXXX compared for in X.X We're a net XX.X quarter. quarter first the decreased expenses offset freight from million with decrease out in XX.X% for operating of of the XXXX were net was of in a local and decreased or

to Orbitz our our We globally closer proximity to levels strategy producing inventory customers. rebuilt finished to return product in have of

through the The the finished XXXX the address for XXX.X chain increased of are environment. Operating to first challenges it to quarter products its supply XXXX in million centers income navigates XX.X% from XXX.X current chain cost in supply uncertainty repositioning costs. comparative million as company freight-in of to continues the included distribution quarter. the The global in

increased effective for XX.X% primarily increase rate the quarter in as the The the tax XXX.X in compared the first XX% quarter. deduction XXXX compared million in XX.X% was XXXX to the in in effective compensation quarter. The million tax XXXX Net the stock first XXXX first quarter. the XXX.X rate to was with decrease income to attributable comparable

to from XXXX, the as first pressures, as international quarter markets during pricing increased first in XXXX company the United implement in plans price first XXXX. markets and of quarter company the the in year. the XXXX other to other a Diluted XXXX, quarter in The additional XXXX. the in in well international Due of many of number cost increases to of the remainder implemented $X.XX actions for earnings $X.XX States per in XX.X% share continued

In an lines, the the States, price XX-ounce April XXXX. XX.X and its United ounce implemented increase additional on X, company effective

company's sales of XX.X% versus period XX.X% further up the energy category, up the including of pricing XX.X% XX and Energy through April weeks were in continue mitigate XX.X%, of report, order also inflationary It's a XX, increased up XX-week XXXX sales Reign Nielsen drug, mass Shots merchandisers, including drink were the will were ago. sales to dollars namely actions in pressures. of outlets Throttle monster sales increased grocery, for We for in review convenience, the Full in X.X%. all opportunities brands to X.X%, Reign period, same the NOS energy the combined, increased According to year by sales

in X-Hour and share channel, all XXXX, in energy XX energy week of XX.X%, X.X%, both X-week company the outlets over shops in VPX convenience previous in increased The XX, Nielsen According the increased same energy Sales decreased X.X%. decreased to dollars Red year. drink sales April market United ended drink in the the Rockstar XX.X%. by ended sales Bang and XX.X%, States category combined in sales to and increased dollars periods a in sales continues weeks including four period of have Bull gas category the of of leadership April XXXX. XX, for the

energy Bang up of X.X% Reign in was convenience the include sales and X.X%. period company's increased Reign, Throttle decreased of by previous which NOS Full Sales Red of up the and down Sales up Monster four-week increased increased gas Sales the period versus X.X% and in X.X%, the same XX.X%, brands, over Bull XX% X-Hourwas Rockstar X.X% up VPX channel. year. XX.X%. XX.X%. were sales was was the

remind point X.X Bang percent. Bull a of at was remained by points X share of drink category to Red four The gas X-Hour year NOS X.X%, Full XX, energy Reign including in lower share to April for to points -- decreased X.X% the ended market half convenience energy a from the ago and to XXXX, share X.X%, share X.X to decreased a points, ago [X.X] X.X year XX.X% and from down point the of share increased share to share Nielsen Once According weeks share share Rockstar XX.X% a was point XX.X% X.X%, in a channel, X.X VPX share XX.X%. decreased XX.X%. Throttle XX.X%, decreased a to dollars the at shots to company's the from [ph]

share is CELSIUS is X.X% share X.X%, and is CX Ghost X.X%. share

our the the ended XX, plus X.X coffee in the Monster includes gas weeks and four XXXX channel increased the of for in category, dollars Nielsen April sales which energy drink line Java convenience to X.X% According of previous Cold higher a Java and the the the Brew year. Java Nitro was over Monster percent period including other Java same previous versus same Monster To year. XXX Monster period

one a Java points. energy higher. plus Monster was was coffee energy point share while energy Starbucks the Sales ended four share down X.X% XX.X% XX, of XXXX weeks of at category Starbucks point X.X for drink were the April XX.X% of

increased XX.X% increased According and to major year XX.X% all brand sales to the ended company's XX.X% XX.X% Nielsen, Sales energy X.X versus points. of company's increased The XX, X.X ago. Canada Monster’s drink increased the XX marketing XX.X. up its market of drink channels was energy the energy share in a in drink points for dollars. March XXXX, in brands the weeks category

sales its to for point March one outlets According X.X% the X.X%. point Mexico, month share market all energy Full share its sales in point increased point and to of decreased of X.X%. XXXX. Nielsen market combined NOS of drink XX.X% category a by the decreased a X.X% for to and Throttle one decreased increased

in X.X Monster’s and/or turn, sales during that particular Consequently, statistics undertaken be month, chain or could convenience be period X.X comparable the a increased value market. increased X.X%. share by OXXO by significant by Sales in which the may previous Nielsen Mexico the Predator the for increased short Monsters’ that period influenced in Mexico. energy OXXO increased positively that market a single chain which chain activities may XX.X%. of against sales XX% its dominates share on convenience negatively cover brands to The materially statistics have from points influenced share such points drink market monthly the often the Sales XX.X% impact more promotions a is and materially be in year. one month. in Nielsen to can

value XXXX, Chile from for the from to the retail increased March our and is Monster XX.X% end in market Brazil Nielsen compared to Chile. for the month in Energy to value In share March sharing energy XX.X% Argentina, March XX.X%. to in brand in XXXX Monster's month XXXX, Argentina According of leading XX.X% Brazil to increased and XX.X%.

are to a referred by country-to-country country-to-country. point EMEA to and the within be like in as the the EMEA vary channels numbers should out month guide Nielsen I'd varying in only because used that dates read from on reported Nielsen from

Republic Africa, XX.X% to from XX.X% sharing XX.X% as year, this share is the XX.X% in value in XX.X%, Britain, According from declined compared from XX.X% period to X.X% from to from week to in in XX.X% XX.X% XX.X% same until to market in XX.X% XX.X% grew of Poland, same XX.X%, XX.X%, South previous X.X% to in Norway, XX.X% from XXXX, in year market Monster's to the from previous in or Sweden. the period Republic, Nielsen, and or to Netherlands, from March the XX.X% Czech in XX.X% Spain, in XX.X% to period end from retail Ireland, XX% from Germany, the to France, once in in to to in XX.X% from XX.X% compared Italy, to value of XX.X% the XX.X% Belgium, to the in the XX% XXth and XX.X% the to retail from Great

retail Nielsen increased period end Monster's of the as Denmark, According until same the previous as XX-week year period same retail Greece. these value in the February a XX% in in previous XX.X% from compared in to year, to XX.X% XXXX, XX.X% to share declined value market share once the in market the period to to compared from

of end in same grew share XXXX, the to until from XX.X% as period compared previous Kenya, [indiscernible] the retail value February XX% to market in Nigeria. According to XX.X% the XX% to the in Nielsen XX-week period in and year from

share decreased from in compared increased XXXX, four in for year. value IRI in value the Mother's share in compared weeks New market to from Live+'s share X, market value Monster's from the weeks to same for XXXX, Australia, value Monster's the to market and to period the XX.X% previous XX.X% Mother's in X.X% Zealand, share from X.X% XX, value X.X%. April increased ending XX.X%. to to XX.X% same IRI the previous period April X.X% According to to as increased According year. XX.X% in the XX.X%, increased market to share from in market ended four

South According in the previous months, outlets to combined, According again the XXXX, periods. XX.X% as from previous month the market ending those often in months month materially to We during or market convenience in in cover March four-week compared XX.X%. in Monster's market to promotions factors XX.X% decreased the or single influenced other to March period out share statistics of to INTAGE same ending to grew trading that be by may channel certain value Monster's Korea, all value same the is positively year, store year from and/or periods in in XX.X%. the XXXX, compared Japan, point negatively share in Nielsen period the

of outside was XX.X% sales to XX.X% U.S. XXXX. quarter customers or the million, net in compared corresponding total sales XXX.X the XXXX in total the first Net of net $XXX.X in quarter, sales to million

company's first the net by in XXXX in U.S. negative sales rates currency or $XX impact in approximately U.S. Foreign and transshipped in the had reported on which sales sales, a customers, overseas. million and the dollars, to customers are our geographic quarter, included to military the exchange their military delivered

same increased compared region and percentage in sales for over as quarter the net to the XX.X% In quarter, EMEA, in period in quarter local net first first this the the currencies dollars, in was XXXX. XXXX. in XX.X% same XX.X% increased sales profit of a XXXX in in X.X% Gross

quarter, also We Britain, gained are that Republic, Norway, Ireland, Monster Great share in and Sweden. Germany, Czech XXXX first France, market Republic pleased the Spain in Italy, of Denmark, Belgium,

In increased XX.X% quarter in first the XXXX. XX.X% period same in over the local dollars increased currencies Asia XXXX sales Pacific, net and in in

in percentage Gross in in same XX.X% and increased Japan net dollars period profit sales in XXXX net XX.X% X.X% sales XX.X% the of in for China. XXXX. Net dollars optimistic sales net Monster We increased over in Korea, the South local the but about in XXXX. market this currency. same currency as region as Japan the Monster XX.X% In compared X.X% brand South in sales leader quarter increased local China, a XX.X% in Korea. XX% and first and in first in prospects remain remains to increased quarter In currency dollars, decreased in increased in the quarter to versus XXXX. same in as compared in the local the the was quarter

currencies. French Zealand, Papua includes New increased local sales and Caledonia, New dollars which Guinea In and XX.X% Tahiti, XX.X% in Polynesia, Net Guam. Australia, Oceania New in

profit XX.X% Latin Caribbean, this the In America, increased and XX.X% quarter dollars in in currencies quarter sales adversely quarter. the region net Mexico in in the XXXX. in in fire net at note the sales Chile. same as by Gross first gross affected was versus for a We increased including in profit was and of period region that over in the XXXX percentage a warehouse a local first XXXX XX% XX.X% XXXX first

profit this in gross We spots are importing and in Argentina. materials that challenges continuing improve The challenges implementing to in raw region. measures with Chile,

in currency increased increased and sales Net Brazil, XXXX XX% XXXX increased currency Argentina and first XXXX net increased XX.X% quarter Chile in in and Net in in by first local in XX.X% in local in in dollars, in local dollars, XX.X% net currency Mexico the XX% dollars, first XXXX In and quarter, the quarter. first XX.X% increased in in quarter. XX.X% XX.X% currency. sales in local dollars in increased sales in sales

energy Energy in the arbitrator an X% damages, appealed We on in Monster Pharmaceuticals, litigation has We will to and certain Orange update infringement VPX, previously drinks. arbitration, will VPX million as awarded which Vital costs and of be an on an now fees provide and XXX discussed or referred VPX Bank, our Bang MEC with attorneys the maker trademark energy and Bang of against which the Company royalty Inc., ongoing product. judgment. future sales found

retailers. Court in misappropriation certain returned XX, of California VPX Additionally, a approximately over XXXX, interference the space and awarding United States with verdict claims Central shelf for its in on on jury trade Monster's million key District XXX secrets the District of damages a advertising, false contract MEC September for against of

district Jack court other amongst from the joins or claiming creatine. creatine form and MECs that Owoc or remaining VPX beverages parties the CEO, other things The or injunction and XX Bang which granted permanent issues. briefing deceptively On former contain XXXX, of post-trial have any April falsely completed motion for a

bankruptcy On for October XXXX, the of protection VPX its certain under and of along Florida. Southern XX subsidiaries, XX, the Chapter District in with filed code affiliates domestic of

the or such claw not The royalty forward, realized first make XXXX, X.X On royalty payments either back VPX approximately moving payment recognize time is they're interim While XX, its are as subject circumstances. or VPX of those in February to the until company realizable. payments amount made potential proceedings award will the to million. royalty certain undertaken in

will sub-judicate, further on are call. answering those we on matters proceedings not be bankruptcy bank and questions litigation this today's As

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we'll Dale's the refreshing of Beer brand Light refresh. part are introducing Dale's the Lager as American We and be

few flavored line to beverage planning within launch a months. are We next new malt the

is We additional product in the new innovation alcohol forward news Our future. pipeline of to beverage look robust. sharing near

Monster indistinguishable available Monster the of flavor line In in cans March first green the Energy February and new developed in sugar successful we Energy XXXX in of a energy Dreams Ultra an XX-ounce as cans. was launched compelling number as We Ultra with Energy original energy address launched quarter. launched available our to at of a is wellness products January States is highly in sleek United Monster XXXX, Reign sugar In XXXX, XXXX, launched which retail. drinks flavor. analogue XX-ounce Monster cans line in drink we Storm, sugar specifically Energy our new Monster was opportunity In XX-ounce a positioned within in zero total unique Strawberry zero the category. zero

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SKUs We sparkling are Tour states. We continuing quarter into several in still in first new in launched Canada. additional XXXX and distribution in Monster to of expand the Water variants the

Latin new In Canada. There Monster we March Monster Peachy Ultra In February we Reign Monster Lemonade Watermelon. Ultra launched Punch we Ozzy and sugar Brazil, launched Monster XXXX, were America. zero in first Keen, XXXX Rainbow in the In XXXX, Style launched SKUs Sherbet. several in quarter

SKU with launched Chaotic. Monster retail Fury Mexico, SKU offerings. Chaos Monster Paraguay Predator and second additionally we at Monster launched Uruguay, previous In affordable Ultra energy Ultra our first product Loca we Bolivia, Manga Paradise. juice Goldstrike. in revamped we launched and [indiscernible] our with expand our Juice Additionally, In further Bolivia, new the to In into our Juice we

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alcohol April that April to XXXX brand segment, sales, higher alcohol a segment. alcohol We on excluding We XXXX, were XXXX, and approximately XXXX the sales excluding X.X% be in comparable estimate the than including X.X% adjusted than XX including sales statement, estimate the higher brand brand basis, higher approximately than higher and XXXX, April brands alcohol X.X% than X.X% April foreign April the segment. the April currency in

centers, in well in days of production. increases launches for in April are shifts regard, disproportionately retail of and the a price for, one the as by product impacted timing April timing over caution timing which factors week compared as as short XXXX distributing In various often period this and of again, day that had promotions we days, selling selling to less such example, the stores, new XXXX. holidays sales of

This requirements, a quarter, bottling In we regarded as sales shared are goals. own production reasons. any indicative from full to responsible future levels not alter reiterate some imputed the such production of dates according that for as a their their business which or time which single We results they a short time distribution invoice own should partners bottlers. their for period. own may necessarily instances, be inventory our such our month period over and to Furthermore, for or and internal to determine on maintain affects bottlers

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the results of early pleased the are We from Beast with the launch Unleashed.

continuing to of the We end the expand the by goal of year. distribution national are being with

excited are CANarchy additional by We the presents. acquisition alcohol the that opportunities

We pleased the Wellness of with of Total are drinks. our line initial our energy new results Reign launch of Storm,

are energy we Fury, with portfolio finally, drink our of and Eight, internationally. pleased rollout Predator the affordable

launch to brands, plans international with proceeding are countries. and additional number of our affordable We energy

like would Thanks. the floor the to quarter. about now to questions I open

will Ladies and the [Operator Instructions]. gentlemen, now question-and-answer session. begin we

UBS. question Our from today Grom from first your go ahead with Please question. comes Peter

I quick if maybe two just So margin may. questions,

but continue margin the sequential you you one, to comment into guidance, don't get performance on So, to want know I improvement. or

selling to as as moderating, with year? a gross today then, a improvement through down cost and bit. expense XXXX? margin And from sales we So coming sequential percentage the we we should see in look in here as It's at somewhat of move pricing, expect related, versus just quite

time, over So as ahead, seen Thanks. that couple to would high look improve? take margin of rate particularly looking single Or to be we've begins past the that we over is you as years sustainable? gross digit this higher

spoken [rolling] the can have first price and and in on you we gross what we've said [ph] we during say your what previous don't we margin, we in EMEA But have guidance. increases, whole addressing year. know, as where question increases So give the about quarters, price

U.S., price the as XX through. will a you sizes and and had last XX.X XX.X, can. we late the larger on a had price that as ounce year know, goes increase, the X escalate year, increase April we in In So the

be continually will that year as through. reflected something that's the goes So

In In we in in pricing some Asia we in LATAM in as pricing on Pacific, year of some QX up later XXXX, largely year. addition, up this took the LATAM in and well. took

believe reducing, sales be situation finished for continue is are balanced part a will for With in where sections benefit, we've a freight obviously they I through P&L that operating they kind freight cost we've aluminum know think, I our and for from distribution as move seen regarded we had as an for, also of which and example, We regard is as go that's pricing regarded So rates two we XXXX. in costs, expense. of of materials to evaluate. we stabilized positive something that, to has trade-in and for us. as to freight-out goods centers And

what challenges today, calls, we the certain are seeing cost our in ingredients, mentioned, script co-packing improvements. that sales, So previous some fees. including are I there think seeing on We and in we're of some and

overall, think, see -- executed haven't situation So they I have had could the that price we major seem benefits, as price and I from the resistance the been sensibly have customers. we have where we -- a if they

own think gives probably you to that So I your assessment. background make the

dealing budgets and consider we consumer are up work we on seriously a necessary the they believe question the our end second where that what towards on market. are in those very of which expenses, with budget needs the your expenses, play. selling a selling factor on then and to And needs our of we is And execute

we to to keep of else do marketing needs programs, look So, we the brands in the our we really end of it themselves at and eyes does. of But don't consumers. quarter the compare everybody to what at and and the the need exciting the

from next Filippo Please with Our ahead Falorni question question. from your go Citi. comes

low Thank balance consumer remaining energy at potential weakness category, you you up held expecting of year the the you're can the seeing signs of the the the base, in for talk what about U.S. trends or about the of are you're drink talked You particularly? category any end in seeing you. solid,

Rodney, you guidance, ahead give don't and we to respond that. So go

Go ahead.

please. No,

go Now you that's ahead, fine.

in not give little the price in and consumer increases category energy products of product. a guidance but bit the has slowing, only and of I there's think We a category, other lot consumer don't been across with all line beverage a

of programs those And been slowing, so snap there there's of that think benefits generally bit a I during bit bit trimming are of were And a being back increased the of now. has little sort little under been COVID. a little pulled

sort again, I think would you But will I as So by rationalization disposable bit settle little see slightly less they of income. that a a buyers have of think down.

pricing. that But the a seeing we it's by volumes, in won't will continue We are I gave other still really increases if category, is as above actual that though, healthy grow. But the direction than category that it'll terms, in In further from there can't, direction. they to continuing think bit the overall and the you certainly we drink we to made little numbers, at of dollar you grow a a give you're be think and Nielsen obviously, Nielsen, look more numbers, slowing. in category we be growth think any dollar energy expand. may But than the will

Our next Goldman question comes go from question. Sachs. from with Bonnie Herzog Please ahead your

I space guess retailers ask Sugar, a from little performing Zero I'm shelf fair you of I meeting amount allocation. some just wanted Reign color of Beast, and expectations got they're of they're bit how the in a buy-in and on, about hearing terms more your the and whether guess to maybe a innovation, little I Storm, incremental space.

just you. with wanted verify that So to

that to in you QX? Zero still or understand market in expecting you. [Technical particular, most Difficulty] to on And then of during Sugar in wanted of out QX certain that Thank kind roll

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pleased been not As very regards realized. and have dip seeing big we for have to a the with We're in results. good had Zero expectations Sugar, green. been product We seem actually expectations the our

big a about in have not a all. be dip lot to its much at questions asked seems people holding I So green cannibalization. own. mean, of seeing But we're very green

we've commendable we additional in I in this not year independence, but achieved So at convenience really have obviously increases the that shelf as for look only channels. we think shelf convenience, Not in space. actively only And various across shelf space, the negotiated very space.

Sugar I out. same roll that also is, to would need other to everywhere not markets international roll add internationally, time Zero number it's have only the going to agenda we The a today up go we plans but of at Bonnie, have do the thing the things into on

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And as well. Yes. just in we launched Canada

So times, product. think I for really particular that exciting

Bonnie's, right with Now the really regard launched Reign the end of to expectations, the at quarter. was first Storm

a we planning. result, additional early but innovation the So a to out have And encouraging. looking we are too on, in the slowly. early we so the of it. at And that it it's also way. trying far, optimistic about that But regard Again, cautious just and we are obviously, with sales, are sales lot been we tell. repeat have of to again, Beast, it's in rolled do alcohol to and some we And

which be we we quite national, the were are we And as additional to the out by we taking we distributed by get to have to continuing it's said to call, end time. distributor, hope we excited, it takes time hope this So system, on distribution product. of year, through the whole But it new rolling there. so are just build

moving So to forward system, I the whole is according plan. working, think

your Our next question. Please Fargo from from Securities. question Wells go ahead Chris Carey with comes

a of can help your as XX.X Just one that closed I perspective Monster bench, are some planning frame to and just much to clarification on but increase that about percentage for is long-term total be It could is on to as often you or bench on ounce? then, the just And of how How long-term. way XX portfolio? contribution bit, place a up developing meaningful bigger how the that, maybe succession Or the behind how overall just pretty building just an offer developing just and that I planning any the those interesting there think enough thought price this picture and a get succession questions going of doors. just about the comes you a and talent if is maybe size business? and one, little talent strong I maybe feel

for thanks the the the of -- bit and a little Thanks. maybe pricing on help So, just on scope development. talent of

to less a you the be assessment at X% I Nielsen X% And in numbers. the sizes probably to you'll that would get if you that see to than range. good look refer those Chris, able percentage. of are XX%, But larger Nielsen, you'll

Secondly, on are Board succession, Rodney the myself Monster concerned and is, and really obviously, succession. about

that something addressing, address are And we ongoing we to continue on basis. an and

bench deep being view, that are growing team our We are very, the develop. in have and developed are in strength and a we a of them us below the helping

very So aware we'll perspective, I the And that are think issue. from something board, to it's that that of. ourselves, well continue address

am neither frankly, the in Rodney think future going and don't foreseeable I is I. However, anywhere

right, and So we is segue new and the when are help time develop team. management here a will

next Teixeira question. question Please comes ahead Our with JPMorgan. from Andrea your go from

a have I clarification. just

that been has on it some back at great coming there in the also But deceleration accretive So absolute How that, question you're is has Ultra? going obviously it who you productivity been seeing pointed in Zero how And Can above would on in plan. gaining you to comment one Monster been how two, look terms first number shelf out of beyond plan? and launch terms the make tracking number as Ultra. a at based and it it your is on against Nielsen Bonnie's against tracking expect. obviously that And one Obviously accretive? which you're U.S. it went seems In has trying it you how all, data. distribution to against numbers of Ultra,

Okay.

product So of And a had the remember Absolutely new we Sugar really Absolutely is Zero. Zero variant that Zero. called

that that it's been was a So Zero Sugar. product the in market has replaced by

on that compare we Zero to numbers see basis, from you XX% Zero for So ACV can Sugar. Zero XX%, an Absolutely moved from when the you for Sugar,

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add will Just I just maybe side. Ultra on the

launch Strawberry a had Ultra successful have of We really Dreams.

I fact think that in little look decreased a your ACV additional bit. some Heavy you some of the or Ultra of the flavors Ultra at the ACV, if Nielsen's, you'll -- of some see

some three, these we this I go are the that and you as just in a through four new the something bit I and attend, at get little SKUs flavor, top look to get think -- five, need sometimes sometimes of lost or think wash. additional not of introducing change or that's

just think seen and and reestablishing of those those. think drop-off on we've some I where in think, sound increase. of And a the that -- we that's sure we on products some bit sales need make -- focus we there's additional to we just little those think solid But will just distribution levels continue really flavors. are I a So there of

Sales sub-brand as flavors put and those need I in internationally. or I Ultra of sort are United some a brand we the we have as flanker are, that had, we've think said, to of which up focus gone just States of But doing. behind some

comes go next question our And Astrachan Stifel. Mark from Please from your with question. ahead

of clearly this that of And Thanks. XQ, implied then kind it's legacy a was to the And of model there alcohol this consider there spending income One because to see we how beneath that business continues repurchase? then, business. to sort implement questions. quarter, be the nice keeps quarter some share going margin, is it sequentially assume to there. on the Any I little what's cash number grow. It on the on growing. gross harder better some should and to were was brands that you'd housekeeping we see a thinking anything Two thoughts like balance, interest surface it trying to than shouldn't lot

side, alcohol the business affected acquired, part they're costs, because that operating On we their costs. the I in that business where own that think of got drop off -- overhead had their running that some a we what fixed seltzer which you've in affected was and we the production quite is that brands did

quarter So were last refitting out of the the as really the are of you products. improving. we able on reported Those we capacity We're for to the line doing -- Beast sort noted in year, very earlier, what call margins on [indiscernible] to the be margins busy one last increase the the business. legacy

forward, business now an start in margins better as start side a Beast the are margin obviously craft facility are we in that. than co-packing, quite scale, using we The some those using seeing will we improvement actually on And be as go the healthier, And we will side. smaller, as lower lot of we will forward, own working And our we as the legacy be on our costs. start some the we business. we be getting co-pack maximizing legacy go on again, they'll will we as probably doing additional will and lower are than

maybe product, side. cash question ahead. on forward, do obviously want Monster but thinner side. think seeing Go the it additional Hilton, there we So we to margin will margin the you take and to traditionally a used are on the And be going is

attention. Mark, our and that, it's cash is we with options again, deal board that balances, a continually something issue are examining to is receiving

is is And shares have to to opportunities them. there at for -- more that But hopefully we're plan premature buying back are about looking at. of program. that to to investments. than So, comment, continue want I intention our continue it further are some addition, our we really we And a shares. possibilities talk buy don't back looking number But that too that's that -- in

turn be today's Sacks I'd time, session. to remarks. question-and-answer at over this we'll Rodney like to floor back closing the Mr. any And, for concluding

you, Thank everyone I'd all thank like for company. to their interest. the continued for

our and We company And to to continue And differentiate both we particular, remain innovate, in and our on in expand the the future about to committed the System. and We believe the hope continuing brands for to of capitalizing we thank our that well abroad. and home with attendance. and you continue our company develop that at believe beverage strategy. relationship Bottlers optimistic in growth the to We be safe your to are And you company. Coca-Cola healthy. and remain industry positioned

gentlemen, presentation. the concluded. for conference attending Ladies you We has and today's thank now

now disconnect may your lines. You