Monster Beverage Company reported a $130.7 million impairment charge on its alcohol brands in Q4 2024, bringing its total write down on its bev-alc business over the last year to more than $138.7 million, the energy drink giant reported yesterday in its Q4 and full-year 2024 earnings report.
“We incurred additional impairments within our alcohol brands segment in the quarter due to financial performance, which is being addressed,” Rodney C. Sacks, chairman and co-CEO, said in the earnings release.
Company leaders had warned earlier this year that additional write downs would be forthcoming on its bev-alc division, created via the $330 million cash acquisition of the former CANarchy Craft Brewery Collective (Oskar Blues, Cigar City and Deep Ellum, Perrin, Wasatch and Squatters) in January 2022 and the additions of flavored malt beverages (FMBs) the Beast and Nasty Beast.
Monster recorded a $39.9 million write-down on its alcohol brands In Q4 2023.
Reasons for the latest impairment charge included “operating and financial performance not meeting projections” and a “decrease in projected ongoing operating and financial performance of the reporting unit.”
In addition to the impairment charge, Monster reported $4.1 million in excess inventory of its alcohol brands during the quarter, and $14.73 million for the full year, which was a drag on gross profit.
For Q4 2024, Monster reported a -0.8% decline in net sales for its bev-alc portfolio, to $34.9 million. A year prior, the company reported bev-alc net sales of $35.2 million in Q4.
For full-year 2024, Monster’s alcohol sales topped $172.4 million, down from around $184.9 million in 2023.
During Thursday afternoon’s call with investors, Sacks noted previous changes to the alcohol division’s leadership, including appointing Ray LaRue as president of Monster Brewing and restructuring the senior management team, including sales, marketing, strategy and operations.
“[Monster] will be implementing further adjustments in the coming months with the intent to optimize our personnel and facilities to support the current demands of our portfolio and innovation pipeline,” he said.
Monster previously shuttered the Deep Ellum and Oskar Blues production breweries in Texas, and transitioned the Cigar City brewery in Tampa to a research-and-development facility.
Hurricane Helene flooded Monster Brewing’s Brevard, North Carolina-based facility, shuttering the location for a week, Sacks said. The facility was partially operational until becoming fully operational in mid-November.
Looking ahead, Monster is shipping 24 oz. single-serve cans of several flavors of its flavored malt beverage (FMB) the Beast in the U.S., including Pink Poison and Killer Sunrise, with Gnarly Grape to follow in the coming months. The company is also rolling out Michi, a flavored beer brand, nationwide this year in two 24 oz. flavors, Chelada and Michelada. Additional new products are expected to follow in the coming months, Sacks said.
The company is also expected to begin international exports of the Beast this summer in select markets, pending regulatory approval.
Even with its challenged alcohol business, Monster grew its total net sales +4.7% year-over-year (YoY), to a record $1.81 billion, the company reported. Q4 net sales of its core Monster Energy Drinks segment increased +4.5%, to $1.67 billion.
The company’s global energy drink business carried the company to a +4.9% increase in net sales for FY2024, growing to $7.49 billion. The company cited “global pricing actions” as a driver for increasing net sales by around $107.3 million last year.
Monster’s 2024 gross profit was 54%, up from 53.1% in 2023. The company’s net income declined -7.5% YoY, to $1.51 billion.
Asked about the risk faced by the company by potential tariffs on aluminum, Monster co-CEO Hilton Schlosberg said “your guess is as good as mine.”
“Things keep on changing day by day,” he said, adding that it would be “really premature to even talk about tariffs, because no one really knows what’s going to happen.
“However, we are hedged to quite a nice extent in 2025 with aluminum, and we have some hedges on the Midwest premium.”