Asked for a review of key innovation performance year-to-date in both US and international markets and the pipeline for the rest of the year.

Hilton Schlosberg noted innovation is spread across the first half of the year, with new launches like FLRT and Storm. Rob Gehring emphasized innovation drives the core business and expands into new usage occasions. Guy Carling highlighted Viking Berry as the most successful innovation ever in EMEA, contributing 45% of regional growth. “innovation should drive our core business”

Sought insight into drivers of strong international growth, distinguishing between share gains and category growth.

Hilton Schlosberg explained international growth mirrors the US, driven by consumer acceptance, household penetration, value proposition, innovation, and expanding usage occasions. He noted energy drinks are becoming more mainstream globally. “energy drinks are becoming more mainstream as this category is developing.”

Asked for more color on strong demand driving out-of-orbit production, if there was pull-forward volume, and if operations are back within orbits.

Hilton Schlosberg confirmed they are back to operating within orbits. He stated that out-of-orbit production was necessary to satisfy unexpected demand and avoid empty shelves, utilizing facilities in Norwalk and Phoenix. “We're back to operating within our orbits, Bonnie.”

MNST

Monster Beverage (MNST) Q1 FY26 earnings call: the analyst Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Staples· May 7, 2026

Source: earnings call transcript

Executive summary

Monster Beverage Q1 FY26 — Record Net Sales and Strong Global Growth

Monster Beverage achieved record first-quarter net sales, surpassing $2 billion, driven by robust double-digit growth across all global regions and strong innovation. Despite gross margin pressures from geographic mix and input costs, the company maintained pricing power and saw healthy category expansion, particularly in international markets. Management remains confident in its brand portfolio and strategic initiatives for sustained growth, including new product launches and digital transformation efforts.

Highlights

Net sales crossed $2 billion for the first time in a fiscal first quarter, reaching $2.35 billion, up 26.9% year-over-year.
Achieved double-digit sales growth across all geographic regions, with international sales increasing 44.9% to $1.06 billion.
Gained share in many global markets, including Monster Energy becoming the fastest-growing FMCG brand by value in EMEA and market leader in Australia.
U.S. net sales increased 15.6% in Q1 FY26, driven by strong core product performance and innovation.
Adjusted diluted EPS increased 23.7% to $0.58 from $0.47 in the prior year.

Concerns

Gross profit margin decreased to 55.0% from 56.5% year-over-year, primarily due to geographical sales mix and increased aluminum can and freight-in costs.
Geographic mix had an approximate 120 basis points adverse impact on gross margin in Q1 FY26.
The Alcohol Brands segment net sales decreased 5.9% to $32.7 million.
Aluminum headwinds in Q1 FY26 impacted margin by just under 1%, with modest sequential cost increases expected through year-end 2026.
Net sales in Argentina decreased 53.5% in dollars and 54.1% on a currency-neutral basis due to an operating model change.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Consolidated Net sales crossed the $2 billion threshold for the first time in the company's history for a fiscal first quarter. Net sales in Q1 FY25: $1.85BNet sales excluding Alcohol Brands increased 27.5% YoYNet sales on a foreign currency adjusted basis increased 22.1% YoYNet sales excluding Alcohol Brands on a foreign currency adjusted basis increased 22.6% YoYAdjusted gross profit % excluding Alcohol Brands: 55.3% (vs 57.1% in Q1 FY25)Operating income: $730.0M (vs $569.7M in Q1 FY25)Adjusted operating income: $733.5M (vs $591.2M in Q1 FY25)	$2.35B	26.9%	—	55.0% (Gross Profit %)
Monster Energy Drinks segment Net sales in Q1 FY25: $1.72BNet sales on a foreign currency adjusted basis increased 22.8% YoY	$2.19B	27.6%	—	—
Strategic Brands segment Net sales in Q1 FY25: $98.3MNet sales on a foreign currency adjusted basis increased 21.4% YoY	$126.7M	28.9%	—	—
Alcohol Brands segment Net sales in Q1 FY25: $34.7M	$32.7M	-5.9%	—	—
US & North America Strong start to the year in the U.S. and Canada, with all channels contributing to sales growth, including e-commerce. Ultra brand family grew 20% in Q1 FY26 vs Q1 FY25 (Nielsen)Ultra White energy drink grew 34% in Q1 FY26 vs Q1 FY25 (Nielsen)Monster's full sugar offerings grew 8.5% in Q1 FY26, outpacing overall full sugar energy drink segmentJuice Monster family grew 26% vs prior yearJava Monster (incl. Killer Brew) grew 5.2% despite ongoing softness in energy drink coffee category	—	15.6%	—	—
International (total) Net sales in Q1 FY25: $733.2MApproximately 45% of total net sales (vs 40% in Q1 FY25)Net sales on a foreign currency adjusted basis increased 32.7% to $973.3M	$1.06B	44.9%	—	—
EMEA Driven by strong execution, trade marketing, cooler placements, and space gains. Monster growing at over twice the rate of the category. Net sales increased 36.5% on a currency-neutral basis YoYGross profit % in Q1 FY25: 35.1%Monster Energy Ultra grew 37.3% (Nielsen, last 13 weeks)Juice Monster grew 23.2% (Nielsen, last 13 weeks)Monster Energy brand retained position as fastest-growing FMCG brand by value and value growth in Q1 FY26Monster is #1 energy drink brand by value in DenmarkPredator and Fury (affordable brands) remain #1 energy drink brand by value in measured countries in Africa	—	52.5% (in dollars)	—	35.9% (Gross Profit %)
Asia Pacific Optimistic about long-term prospects and expansion of affordable brands in China and India, despite systems disruption at Japanese distributor. Net sales increased 36.7% on a currency-neutral basis YoYGross profit % in Q1 FY25: 42.4%Japan net sales: +3.6% YoY (+4.9% ex-FX)South Korea net sales: +10.3% YoY (+11.8% ex-FX)China net sales: +95.0% YoY (+86.5% ex-FX)India net sales: +94.5% YoY (+104.4% ex-FX)Oceania net sales: +53.2% YoY (+42.1% ex-FX)Monster has overtaken V and Red Bull to become market leader in Australia on a value basis	—	39.7% (in dollars)	—	42.8% (Gross Profit %)
Latin America & Caribbean Net sales increased 22.3% on a currency-neutral basis YoYGross profit % in Q1 FY25: 44.6%Brazil net sales: +61.3% YoY (+41.9% ex-FX)Mexico net sales: +24.1% YoY (+6.6% ex-FX), gained market share and remain market leaderChile net sales: +50.3% YoY (+36.3% ex-FX)Argentina net sales: -53.5% YoY (-54.1% ex-FX) due to operating model change, but bottled depletions increased double digits	—	36.0% (in dollars)	—	44.1% (Gross Profit %)

Product announcements

Product	Type	Timeline
Monster Ultra Punk Punch	launch	Q1 FY26
Juice Monster Voodoo Grape	launch	Q1 FY26
Monster Energy Strawberry Shots (Full Sugar & Zero Sugar)	launch	Q1 FY26
Lando Norris Zero Sugar	launch	Q1 FY26
FLRT	launch	late March
Storm	launch	earlier this week (early May 2026)
Monster Green and Ultra brand families (package & flavor innovation)	update	summer
Ultra, Juice, Reign, and Bang brand families (America 250 celebrations)	update	summer
Monster Green, Ultra White, Ultra variety pack (club channel)	update	recently introduced
Juice Monster Viking Berry (EMEA)	launch	Q1 FY26
Monster Energy Ultra Fantasy Ruby Red (EMEA)	expansion	ongoing rollout
Monster Energy Lando Norris Zero Sugar (EMEA)	expansion	ongoing rollout
Monster Energy Valentino Rossi Zero Sugar (EMEA)	expansion	ongoing rollout
Bang (Spain)	launch	Q1 FY26
Monster Energy Ultra Vice Guava (EMEA)	launch	summer months
Oscar Piastri Monster Green and Green Zero Sugar cans (EMEA)	launch	summer months
Gold limited edition Monster Energy Lando Norris Zero Sugar Can (EMEA)	launch	summer months
Monster Energy Green (Japan)	expansion	this summer

Capital programs

Digital Transformation Initiatives (SAP S/4HANA) underway

Period spend: $5.8M

Benefit:modernize enterprise platforms and strengthen end-to-end business capabilities across commercial, operations and supply chain

General and administrative expenses in the 2026 first quarter included $5.8 million of expenses related to our digital transformation initiatives. The upgrade to SAP S/4HANA has a planned go-live date of January 1, 2028.

Risks & headwinds

Tariff landscape complexity ongoing

modest impact on business in Q1 FY26

Mitigation:implementing hedging strategies where possible

Increased aluminum can costs due to Midwest Premium continued modest sequential increase through at least end of 2026

just under 1% of margin impact in Q1 FY26

Mitigation:implementing hedging strategies

Increased freight-in costs Q1 FY26

resulted in out-of-orbit production costs

Mitigation:back to operating within orbits

Adverse impact of geographical sales mix on gross margin Q1 FY26

approximate 120 basis points adverse impact

Systems disruption at Japanese distributor Q4 FY25 and Q1 FY26

impacted prior quarter, but Q1 FY26 Japan net sales still grew 3.6% in dollars and 4.9% on a currency-neutral basis

Ongoing softness in the energy drink coffee category Q1 FY26

Java Monster, including Killer Brew, increasing 5.2% despite ongoing softness

Q&A highlights

Inquired about the company's ability to manage costs and potential for incremental pricing given strong sales momentum and expected cost increases.

Hilton Schlosberg acknowledged Q1 gross margin headwinds from geographic mix and out-of-orbit production. Rob Gehring and Guy Carling confirmed pricing actions from late 2025 are working, and they continuously evaluate market conditions for future pricing, noting the category's resilience.

“you don't bank percentages, you bank actual dollars.”

asked by Chris Carey · answered by Hilton Schlosberg

2 min read 6 chapters

Detailed narrative

Global Energy Drink Category Health

The global energy drink category remains healthy with continued robust growth, driven by increasing household penetration, functionality, lifestyle positioning, diverse offerings, and affordable value propositions. Monster's portfolio is well-positioned to capitalize on this growth across geographies, price points, and need states. The category is becoming more mainstream, with increasing buy rates and expanding usage occasions across dayparts.

Innovation Strategy and Performance

Innovation continues to be a key contributor to category growth, with Monster maintaining a robust pipeline. The company's strategy is for innovation to drive its core business, as seen with new entries like FLRT for the female energy category and Storm for wellness, alongside core brand extensions.

In EMEA, Juice Monster Viking Berry was the most successful innovation launch ever, contributing 45% of regional growth, with existing SKUs accounting for the remaining 55%.

Marketing and Sponsorships

Monster maintained strong marketing momentum in Q1 FY26, leveraging high-profile sponsorships. Highlights included UFC's transition to a new broadcast partner, resulting in a 3x increase in television viewers for Monster signage. The company also saw success in MotoGP, Motocross, and Formula 1 with sponsored athletes and teams, and was the main sponsor of the WHOOP UCI Mountain Bike World Series, alongside X Games and Winter Olympics medal wins.

Digital Transformation & SAP S/4HANA

The company is undergoing a digital transformation to modernize its enterprise platforms and strengthen end-to-end business capabilities across commercial, operations, and supply chain. This initiative includes an upgrade to SAP S/4HANA, with a planned go-live date of January 1, 2028. This transformation is expected to enhance efficiency and operational effectiveness.

Pricing Strategy & Cost Management

Pricing actions implemented in late 2025 continue to perform as expected, with the energy drink category showing resilience to modest inflation. Management continuously evaluates opportunities for further price increases both domestically and internationally, balancing the cost environment, particularly for aluminum and freight, with consumer tolerance and overall category performance. The company aims to optimize growth while managing input costs.

Multipack Strategy and Channel Expansion

As the energy drink category becomes more mainstream, the opportunity for multipacks is increasing. Monster has expanded its multipack offerings, including 12-pack variety packs and 24-packs of 12-ounce cans in club channels, which are driving higher household consumption rates. The company is also focused on expanding sales in non-Nielsen tracked channels and its FSOP (Food Service On-Premise) business.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.