06:11 AM EST, 11/08/2024 (MT Newswires) -- Monster Beverage ( MNST ) shares fell early Friday as the energy drink company's third-quarter results fell short of Wall Street's estimates amid softening demand and a tight consumer spending environment.

Adjusted net income fell to $0.40 a share during the three-month period ended Sept. 30 from $0.41 a year earlier, the company said late Thursday, trailing the Capital IQ-polled consensus of $0.43.

Sales rose 1.3% year over year to $1.88 billion, missing the Street's view of $1.91 billion, with foreign currency fluctuations having a negative impact of $62.8 million.

"A number of other consumer packaged goods companies have also seen a tighter consumer spending environment for certain income groups and weaker demand in the quarter," co-Chief Executive Rodney Sacks said during a conference call Thursday, according to a Capital IQ transcript. "Hurricane Helene and Milton impacted sales at retail in certain states in September and October 2024. However, we cannot determine the impact on our business."

Monster Beverage ( MNST ) shares fell more than 6% in premarket trading.

The Monster energy drink segment sales inched up 0.8% year over year to $1.72 billion, while the strategic brands division advanced 14% to $112.6 million.

The energy drink category continued to see slower growth rates in the US, Sacks said on the call.

"However, in all measured channels, excluding convenience, the energy drink category is growing at a faster rate. In the United States, the energy category in the convenience channel is beginning to show some improvement in October," he added.

Revenue in alcohol brands fell 6% to $39.8 million mainly due to a decline in sales volume of craft beers, according to the company. Sales to customers outside the US, which accounted for roughly 40.4% of total revenue, rose 3.6% to $760.1 million.

Operating expenses rose to $519.9 million from $473.2 million in the prior-year quarter. "The increase in operating expenses were primarily the result of increased payroll expenses, increased sponsorship and endorsement expenses as well as the intellectual property claims," Sacks told analysts.

The company reiterated its plan to increase prices in the US by about 5% for its core brands and packages, effective Nov. 1.

"We cannot yet gauge the impact of the company's 5% price increase in the US this fall but continue to believe the company will have to give up most of the benefit via promotions," Truist Securities said in a client note. "On the call, management indicated their belief that the slowdown was nearing the end, however we remain doubtful due to the continued pressure on the consumer and hyper-promotional nature of the category."

The brokerage maintained its sell rating on Monster Beverage ( MNST ) shares.

Price: 51.44, Change: -3.29, Percent Change: -6.01