Monster Beverage Shares Fall 6% After Q3 Gross Margin Miss as International Growth Lifts Sales

Monster Beverage Corporation fell roughly 6% in premarket trading on November 6 after the energy drink maker reported third-quarter results that beat on the top line but disappointed on profitability. Net sales rose 16.7% to $2.56 billion from $2.20 billion a year earlier, with international sales surging 28.1% to $1.20 billion and accounting for approximately 47% of total net sales. On a foreign currency adjusted basis, net sales grew 16.3%.

The gross margin miss drove the selloff. Gross profit as a percentage of net sales fell to 54.7% from 55.7% in the prior-year third quarter, with the decline attributed to higher aluminum can costs, rising freight-in expenses, and an unfavorable geographic sales mix as faster-growing international markets carry lower margins. Adjusted gross profit, excluding the Alcohol Brands segment, came in at 54.9% versus 56.2% a year ago. Distribution expenses also climbed, rising to $116.3 million, or 4.5% of net sales, from $82.6 million, or 3.8%, in the same period of 2025.

Despite the margin pressure, some analysts saw the volume strength as a reason for optimism. Jefferies raised its price target on Monster Beverage, maintaining a Buy rating, citing the company's growth trajectory. UBS also raised its price target while keeping a Neutral rating, pointing to the sales growth. The question for investors is whether Monster can convert its accelerating global expansion into stronger earnings as input and distribution costs remain elevated.