Shares in Hansen Natural Corp., makers of Monster Energy,
plunged to their lowest price in more than a year Thursday after the company
reported lower-than-expected first-quarter profits stemming from lower profit
margins.
Hansen stock tumbled $4.20, or 11.8 percent, to $31.40 in
morning trading. Earlier, shares traded as low as $28.51, their lowest level
since December 2006.
Goldman Sachs analyst Judy Hong told the Associated Press that Monster’s sales
growth was surprisingly weak, and she now expects slower sales growth.
She attributed most of the shortfall to Hansen’s decision to
invest more money in its own business – something she said could lead to weak
profit margins for the rest of the year.
Gregory Badishkanian of Citi Investment Research told the AP that Hansen is selling more of its
new Java Monster coffee drinks, which are not as profitable as Monster drinks.
Regardless of Hansen’s stock value, Monster is threatening
to steal Red Bull’s supremacy in the energy drink category. According to recent
Nielsen convenience store scanner data, Red Bull still holds 36.2 percent of
the energy drink market, but Monster had climbed to 30.1 percent after growing
their sales by more than a third in the past year.
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