MNST - NASDAQ

Good evening, and welcome to the Monster Beverage Company Third Quarter 2024 Conference Call. All participants are in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Rodney Sacks and Mr. Hilton Schlosberg, Co-CEOs. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Thanks for attending this call. I’m Rodney Sacks, Hilton Schlosberg, our Vice Chairman and Co-Chief Executive Officer. He is also on the call, as is Tom Kelly, our Chief Financial Officer. Tom Kelly will now read our caution restatement.

Before we begin, I would like to remind listeners that certain statements made during this call may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended and are based on currently available information regarding the expectations of management with respect to revenues, profitability, future business, future events, financial performance and trends. Management cautions that these statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside the control of the Company that may cause actual results to differ materially from the forward-looking statements made during this call. Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K filed on February 29, 2024, and quarterly reports on Form 10-K, including the sections contained therein entitled Risk Factors and Forward-Looking Statements for discussion on specific risks and uncertainties that may affect our performance. The Company assumes no obligations to update any forward-looking statements, whether as a result of new information, future events or otherwise. I would also like to note that an explanation of the non-GAAP measures, which may be mentioned during the course of this call, is provided in the notes in the condensed consolidated statements of income and other information attached to the earnings release dated November 7, 2024. A copy of this information is also available on our website at www.monsterbevcorp.com in the Financial Information section. I would now like to hand the call over to Rodney Sacks.

Thanks, Tom. The energy drink category continues to grow globally and has demonstrated resilience. In the United States, the energy drink category continued to experience slower growth rates. However, in all measured channels, excluding convenience, the energy drink category is growing at a faster rate. In the United States, the energy drink category in the convenience channel is beginning to show some improvement in October. Although, we do not normally refer to one-week Nielsen statistics and do not intend to do so on an ongoing basis, I think that it is noteworthy to mention that according to Nielsen, for the one-week ended October 26, 2024, for all outlets combined, namely convenience, grocery, drug, mass merchandisers, sales in dollars in the energy drink category, including energy shots increased by 3.7% versus the same period a year ago, while sales of the Company’s energy brands including Bang were up 2.9% and sales of Monster were up 2.2%. 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. Hurricanes Helene and Milton impacted sales at retail in certain states in September and October, 2024. However, we cannot determine the impact on our business. The alcohol segment operates a brewery in Brevard, North Carolina, which was closed for a week due to flooding from Hurricane Helene. This brewery is partially operational and is expected to be fully operational by mid November 2024. We believe that many consumers view energy drinks as an affordable luxury. Growth opportunities in household penetration and per capita consumption along with consumers growing need for energy are positive trends for the category. In EMEA, the energy drink category according to Nielsen for the recently reported 13-week periods for our tracked markets, which differ from country-to-country is growing at approximately 11.1% versus the same period last year on an FX neutral basis. In APAC, for our tracked markets, the energy drink category according to Nielsen and INTAGE for our tracked markets for the 13-week period ending September 2024 is growing at approximately 13.6% versus the same period last year also on an FX neutral basis. In LatAm, for our tracked markets, the energy drink category according to Nielsen for the recently reported 13-week periods, which differ from country-to-country is growing at approximately 21.1% versus the same period last year, again also on an FX neutral basis. Gross profit for the 2024 third quarter was adversely impacted by an increase in inventory reserves, due to excess inventory levels in the Alcohol Brands segment of $10.6 million, which I will refer to later in this call as the Alcohol Brands inventory reserves. Operating expenses for the 2024 third quarter were adversely impacted by a $16.7 million provision and $1.2 million of Company incurred legal expenses in connection with an intellectual property claim brought by the descendants of Hubert Hansen in relation to the Company’s use of the Hubert Hansen name prior to the transaction with the Coca-Cola Company, which closed in 2015. And, I will also refer to this later this call as the intellectual property claim. Net of tax, these items adversely impacted net income for the 2024 third quarter by $21.5 million and net income per diluted share by $0.02 per share. Diluted earnings per share on a pro forma basis for the 2024 third quarter adjusted for these items was $0.40 per share. On July 31, 2023, the Company completed its acquisition of substantially all of the assets of Vital Pharmaceuticals Inc. and its debtor affiliates. Inventory purchased as part of the Bang Transaction was recorded at fair value, which I will refer to as the Bang Inventory Step-Up. Certain of the purchased inventory was subsequently sold in the 2023 third quarter and was recognized through cost of sales at fair value. Gross profit was negatively impacted by approximately $7.8 million during the 2023 third quarter as a result. During the 2023 third quarter, in connection with the Bang Transaction, the Company recorded a gain of $45.4 million in interest and other income. During the 2023 third quarter, the Company incurred approximately $8 million of acquisition costs related to the Bang Transaction. Net of tax, these items positively impacted net income for the 2023 third quarter by $22.7 million and net income per diluted share by $0.02 per share. Diluted earnings per share on a pro forma basis for the 2023 third quarter adjusted for these items was $0.41 per share. In addition to our GAAP condensed consolidated statement of income and other information and our GAAP condensed consolidated balance sheet for the Company for the quarter ended September 30, 2024 attached to our press release is a non-GAAP adjusted condensed consolidated statement of income and other information adjusting for the items impacting profitability and a reconciliation of GAAP and non-GAAP information. We believe that these non-GAAP items are useful to shareholders on this call in evaluating our ongoing operating and financial results. These non-GAAP items should be considered in addition to and not in lieu of U.S. GAAP financial measures. The Company achieved record third quarter net sales of $1.88 billion in the 2024 third quarter or 1.3% higher than net sales of $1.86 billion in the comparable 2023 quarter, 4.7% higher on a foreign currency adjusted basis. Net sales on a foreign currency adjusted basis excluding the Alcohol Brand segment increased 5% in the 2024 third quarter. Gross profit as a percentage of net sales in the 2024 third quarter was 53.2%, compared with 53% in the 2023 third quarter. Gross profit for the 2024 third quarter was adversely impacted by the Alcohol Brands inventory reserves. Gross profit as a percentage of net sales for the 2024 third quarter, exclusive of the Alcohol Brands inventory reserves, was 53.7%. The increase in gross profit as a percentage of net sales for the 2024 third quarter was primarily the result of lower input costs, pricing actions in certain international markets, and the Bang Inventory Step-Up, partially offset by higher promotional allowances as a percentage of net sales, mainly to drive trial and awareness of the Bang Energy brand in the United States, as well as the Alcohol Brands inventory reserves. On a sequential quarterly basis, adjusted gross margins were higher than the 2024 second quarter gross margins. Operating expenses for the 2024 third quarter were $519.9 million compared to $473.2 million in the 2023 third 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. As a percentage of net sales, operating expenses for the 2024 third quarter were 27.6%, compared with 25.5% in the 2023 third quarter. Adjusted operating expenses after making the adjustments described earlier increased 8% to $502 million as compared to $464.8 million in the 2023 comparable quarter. Distribution and warehouse expenses for the 2024 third quarter were $82.7 million or 4.4% of net sales compared to $85.7 million or 4.6% of net sales in the 2023 third quarter. Operating income for the 2024 third quarter decreased 6% to $479.9 million from $510.5 million in the 2023 comparative quarter. Adjusted operating income after making the adjustments described earlier decreased 3.5% to $508.4 million as compared to $526.8 million in the 2023 comparable quarter. The effective tax rate for the 2024 third quarter was 21.8%, compared with 22.2% in the 2023 third quarter. Net income decreased 18.1% to $370.9 million as compared to $452.7 million in the 2023 comparable quarter. Adjusted net income after making the adjustments described earlier, decreased 8.8% to $392.4 million as compared to $430 million in the 2023 comparable quarter. Diluted earnings per share for the 2024 third quarter decreased 11.7% to $0.38 from $0.43 in the third quarter of 2023. Adjusted diluted earnings per share after making the adjustments described earlier decreased 1.6% to $0.40 per share as compared to $0.41 per share in the 2023 comparable quarter. Our third quarter financial results were again impacted by unfavorable foreign currency exchange rates in certain markets. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the 2024 third quarter of $62.8 million. We estimate that diluted earnings per share were adversely impacted by approximately $0.03 per share due to the unfavorable foreign currency exchange rates. As previously reported, we have taken a 5% increase on our brands and packages, excluding Bang, Reign, and Reign Storm, effective November 1, 2024 in the United States. We are continuing to monitor opportunities for further pricing actions in our international markets. The Company continues to have market share leadership in the energy drink category for all outlets combined in the United States for the 13-week period ended October 26, 2024. According to the Nielsen reports for the 13-weeks through October 26, 2024, all outlets combined excluding convenience, sales in dollars in the energy category, including energy shops increased by 4.9% versus the same period a year ago. According to the Nielsen report for the 13-weeks through October 26, 2024, for all outlets combined, namely convenience, grocery, drug, mass merchandisers, sales in dollars in the energy drink category including energy shots increased by 1.9% versus the same period a year ago. Sales of the Company’s energy brands including Bang were down 0.6% in the 13 week period. Sales of Monster declined 1.8%. Sales of Reign were down 2.9%. Sales of NOS increased 2.9% and sales of Full Throttle decreased 5.4%. Sales of Red Bull increased 5%. According to Nielsen, for the four-weeks ended October 26, 2024, sales in dollars in the energy drink category in the convenience and gas channel, including energy shots in dollars increased 1.5% over the same period the previous year. Sales of the Company’s energy brands including Bang were flat in the latest four-week period in the convenience and gas channel. Sales of Monster decreased by 1.6% over the same period versus the previous year. Reign sales decreased 4.4%, NOS was up 3.9%, and Full Throttle was down 4.4%. Sales of Red Bull were up 5.6%. According to Nielsen, for the four-weeks ended October 26, 2024, the Company’s market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, decreased from 37.3% to 36.8%, including Bang. Monster’s share decreased from 29.7% a year ago to 28.7%. Reign share decreased 0.2 of a share point to 2.8%. NOS’s share increased 0.1 of a share point to 2.6% and Full Throttle share remained at 0.7%. Bang’s share was 1.9%. Red Bull share increased 1.4 share points to 35.9. Market share of certain competitors were as follows: CELSIUS 7.7, C4 3.4, 5-Hour 3.1, Rockstar 2.8 and GHOST 3.1. According to Nielsen, for the four-weeks ended October 26, 2024, sales in dollars in the Coffee + Energy Drinks category, which includes our Java Monster line in the convenience and gas channel, decreased 7.9% over the same period the previous year. Sales of Java Monster, including Java Monster 300 were 3% lower in the same period versus the previous year. Sales of Starbucks Energy were 14.8% lower. Java Monster’s share of the Coffee + Energy Drinks category in the four-weeks ended October 26, 2024 was 58.6%, up three points, while Starbucks Energy’s share was 40.8%, down 3.3 points. According to Nielsen, in all measured channels in Canada, for the 12-weeks ended October 5, 2024, the energy drink category increased 7.7% in dollars. Sales of the Company’s energy drink brands increased 8.3% versus a year ago. The market share of the Company’s energy drink brands increased 0.2 of a point to 40.7%. Monster sales increased 3.9% and its market share decreased 1.3 points to 35%. NOS’s sales increased 16.2% and its market share increased 0.1 of a share point to 1.3%. Full Throttle sales decreased 3.5% and its market share decreased 0.1 of a point to 0.05%. According to Nielsen, for all our efforts combined in Mexico, the energy drink category increased 16.3% for the month of September 2024. Monster sales increased 11.3%. Monster’s market share in value decreased 1.3 points to 27.6% against the comparable period the previous year. Sales of Predator increased 18.6% and its market share increased 0.1 of a share point to 6.2%. The Nielsen statistics for Mexico cover single months, which is a short period that may often be materially influenced positively and or negatively by sales in the Oaxaca convenience chain, which dominates the market. Sales in the Oaxaca convenience chain in turn can be materially influenced by promotions that may be undertaken in that chain by one or more energy drink brands during a particular month. Consequently, such activities could have a significant impact on the monthly Nielsen statistics for Mexico. According to Nielsen, for all outlets combined in Brazil, the energy drink category increased 19.9% for the month of September 2024. Monster sales increased 28%. Monster’s market share in value increased 3.1 points to 48.2%, compared to September 2023. In Argentina, due in part to the impact of inflation related local currency price increases, the energy drink category increased 202.5% for the month of September 2024. Monster sales increased 182.5%. Monster’s market share in value decreased 3.8 points to 53%, compared to September 2023. In Chile, the energy drink category increased 11.7% for the month of September 2024. Monster sales increased 12.9%. Monster’s market share in value increased 0.5 point to 40.3%. Monster Energy remains the leading energy brand in value in Argentina, Brazil, and Chile. I would like to point out the Nielsen numbers in EMEA should only be used as a guide because the channels read by Nielsen in EMEA vary from country-to-country and are reported on varying dates within the month referred to from country-to-country. According to Nielsen, in the 13-week period ending October 6, 2024, Monster’s retail market share in value as compared to the same period the previous year grew from 31% to 32.8% in Great Britain, from 5.6% to 7.9% in the Netherlands, and from 40.2% to 40.4% in Spain. According to Nielsen, in the 13-week period ending October 6, 2024, Monster’s retail market share in value as compared to the same period the previous year declined from 16.4% to 16.3% in Belgium, from 30.2% to 27.1% in France, and from 35.4% to 34.2% in Norway. According to Nielsen, in the 13-week period ending September 30, 2024, Monster’s retail market share in value as compared to the same period the previous year declined from 18.3% to 17.9% in Germany. According to Nielsen, in the 13-week period ending September 8, 2024, Monster’s retail market share in value as compared to the same period the previous year grew from 18.6% to 19.8% in Poland and from 30% to 31.1% in the Republic of Ireland. According to Nielsen, in the 13-week period ending September 8, 2024, Monster’s retail market share in value as compared to the same period the previous year declined from 16% to 15.2% in Sweden. According to Nielsen, in the 13-week period ending August 31, 2024, Monster’s retail market share in value as compared to the same period the previous year declined from 38.2% to 36% in Greece and from 31.8% to 30.9% in Italy. According to Nielsen, in the 13-week period ending August 25, 2024, Monster’s retail market share in value as compared to the same period the previous year grew from 18.3% to 18.8% in South Africa. According to Nielsen, in the 13-week period ending August 11, 2024 Monster’s retail market share in value as compared to the same period the previous year remained flat at 21.7% in the Czech Republic. According to Nielsen, in the 13-week period ending August 11, 2024, Monster’s retail market share in value as compared to the same period the previous year declined from 28% to 27.1% in Denmark. According to Nielsen for the 13-week period ending August 23, 2024, the retail market share of Predator also branded Fury in certain markets in value as compared to the same period the previous year grew from 4.3% to 8.5% in Egypt, from 32.8% to 38.8% in Kenya, and from 20.3% to 22.6% in Nigeria. Combining our markets in EMEA for the last 13-weeks, the energy category has grown 11.1%. Of note, for the same period, the category in our Western European markets grew 6.2%, our Eastern European markets grew 4.2%, and our Africa and Middle East markets grew 27.5%. According to IRI for all outlets combined in Australia, the energy drink category increased 8.7% in the four-weeks ending October 20, 2024. Monster sales increased 19.9%. Monster’s market share in value increased 1.8 points to 19.1% against the comparable period the previous year. Sales of Mother increased 4.5% and its market share decreased by 0.4 of a share point to 10.1%. According to IRI for all outlets combined in New

Thank you. [Operator Instructions]. Your first question comes from Andrea Teixeira with JPMorgan.

Thank you. Good afternoon, everyone.

Hi Andrea.

I want to just go back to the expectation of the flow through from pricing and how much you had to deal back on that? And how is your view on the state of the energy drink category given what’s happening in particular now with October understandably, but one extra selling day, it might be a little soft from what I think investors would expect. So, I would appreciate your views on both. Thank you.

Yes. So, Andrea, when we have a price increase, we have to see where that price increase settles. And once we see a price increase settle and determine in what direction it’s heading, what the elasticity of demand is, we are then in a better position to determine what promotional activity, if any, needs to be set against the brands. So, it’s a really difficult question to answer at this time.

I think Andrea had a couple of other questions. Do you want to quickly go through your other questions, Andrea?

Thank you, Hilton. Yes, I was just saying if there is any pull forward that you saw, so that it would inform some of that. I mean, I would say October would have been stronger if that’s the case. Would you say there was any pull forward for the pricing? In other words, like the retailers would take in more inventory ahead of the pricing?

Okay. So, we sell to the distributors, right, the Coca Cola distributors. And we allow them a certain amount that they can buy in and we cut off the old pricing in the middle of October. So, I’m not sure and we’ve looked at it and we cannot determine with reasonable certainty what if any of that increase was attributable to buy ins. I suspect there could have been some, but we just can’t determine that. And in the same vein, it’s hard to determine what the impact of the hurricanes were Milton and Helene were on the business. We know that at retail it was impacted and we’ve done some work to try and assess the extent to which our own business could have been impacted. But again, it’s difficult to determine. What we can say is that, if you look at the territories that were impacted by the hurricanes, both of them, there’s probably a 1% differential between Nielsen activity in those territories and the activity through the U.S. So, there definitely was an impact. But again, we can’t determine the impact on our business.

And then in terms of state of the union for the energy category as we stand right now, I’ll be appreciative of knowing your view.

Well, if we look at foot traffic in convenience, convenience is 62% of the Nielsen category for energy drinks. And we look at foot traffic and we talk to our retailers we get some input from third party market research companies and refer to the one anecdotal week that we spoke about earlier on this call. I think we have and it’s again a personal view, I think we’ve reached the bottom and are very close to the bottom. And I think here in Monster anyway, we actually feel good about things coming back. I mean, we saw what happened today that there was a rate cut. The election is over, which probably will give consumers bigger better confidence whichever party got in. I think there was some concern about the election. Now it’s over. We’ve passed that. We’ve got a rate cut today. And what we’ve seen in our industry is that there hasn’t been a change in consumer preferences and a change to different types of drinks. Our consumers have stayed with energy drinks and instead of, we believe instead of drinking three a week or four a week, they’ve been drinking one or so less.

Okay, helpful. Thank you.

Yes, I think it is quite noteworthy. If you look at we started the Nielsen for the period ended 26 October. If you look at the latest 13 week period, the category was up 1.9. You look at the latest 14 weeks, the whole category in general was up 3.2 and the latest week is 3.7. So that trend has been and that’s why we refer to it. We think there is some recovery trend there, but we’ll have to wait and see with how that pans out.

Yes. And then just getting back to October very quickly, we did mention on the call, we had a really high hurdle rates over last year. So, that’s another factor to bear in mind when you look at the October increases, which I thought were actually quite good.

Your next question comes from Chris Carey with Wells Fargo Securities.

Hey, guys. Thanks for the question. Can you just maybe touch on how you see inventory levels or how you saw inventory levels going into October? And really what I’m getting at here is, is it just a comp or because you sound quite good on consumption trends, but maybe distributors were still a bit reticent to take on more inventory. And now that the consumption is coming through, perhaps do you feel there could be a resumption into the remainder of the quarter? Because I think basically what’s getting contemplated right now is if you’re kind of running flattish for the quarter, excluding the extra day or if this is just comp and the consumption trends should start to show through in your numbers as well. So any comment there would be maybe helpful.

Yes, happy to do that, Chris. The way our business works, we sell to the Coke distributors. They place orders and we execute those orders. So, they have sophisticated systems that take into account consumption. That’s one of the factors, weather another factor and a whole bunch of other factors and they order product that we deliver. So, we also have a some we have a small direct business and we’ve spoken about the non-measured channels, which is done directly by us. But generally, we execute orders according to customer requirements. So, some of our competitors have hiccups in inventory. We don’t our business doesn’t behave in that way. We supply orders according to what our customers order.

Your next question comes from Filippo Falorni with Citi.

Hi, good afternoon, guys. I wanted to ask about just your comment about the improvement in the category in October. How much do you think innovation plays a role as well? You sounded excited about the Vice Guava. Just general thoughts of if you think innovation can also drive further acceleration into the U.S. category as you think into October and the balance of the year? Thank you.

Look, I think innovation does drive some consumption, but we’ve had innovation. We had probably three or four new innovative products in the first half of the year. We only really started to get product on shelf on our latest innovation which is one SKU sort of towards the end of October. So yes, there has been some benefit from that if you take the one week numbers. But I think overall, I don’t think it has that has had much impact. I think the overall impact that we’re seeing across a number of our other SKUs is also been trending sort of upwards as well. We see the South point just moving in a better direction. So, again, a short period of time doesn’t make a whole summer. But at the end of the day, we do start feeling because everybody’s been seeing the slower traffic and the sort of this little bit of stagnation in the category. But we do see signs of it starting to re-emerge and consumers being able to go back into stores and not buying again.

Yes. I mean, we said earlier, we believe the overall macroeconomic conditions are improving and that’s positive. And the foot traffic inconvenience, I think that’s another factor. As I mentioned earlier, we get third party research. We talk to our customers and that’s all positive. So, add that to this equation, and I think you’ll maybe come out with the kind of answer that we’re thinking about here as well.

Your next question comes from Mark Astrachan with Stifel.

Yes. Hey, guys. Good afternoon. Hope all is well.

Hi, Mark.

I wanted to ask about gross margin in EMEA. I know it’s sort of specific, but it’s one of those questions that I think a lot of people are curious about and don’t have a huge amount of color. The trends have really improved over the last couple of years, but you’re still decently below 2022 levels or 2021 levels, I should say. I guess the question is without asking for guidance because I know you don’t want to give it, what do we think about from here? I mean, is it reasonable to think that you can get back to 2021? And if you don’t want to specifically answer that, what are the trends that have led to the improvement in that region from a gross margin standpoint? And how sustainable are they?

Well, we have taken price. And we’ve taken price historically in a number of international markets and we continue to examine opportunities to do so. The cost of production and the cost of raw materials, there have been increases over time and significantly increases since COVID. We’re doing our very best to manage and hedge aluminium exposure, which is obviously a big cost in this company. So, we use a ladder, which we may have spoken about on previous calls, but if we didn’t, I’ll talk about it now. We have a ladder strategy, where we execute hedges to assist in managing aluminium exposure, and we really do examine that on a weekly basis or semi twice a month. So, that’s something that we look at. So, all in all, we have a business that is focused some in the U.S. you heard about the numbers overseas, which are growing and they have lower margins, although we spoke about the EMEA margins on this call that have moved up in the quarter, which is the trend we are looking to achieve. And then we have alcohol, which is currently is at a lower margin lower percentage margin than the rest of the business. So, we here are very focused on improving margin wherever we can and we will not stop in that pursuit. But it’s something that we’re carrying on working on and it’s a work in progress.

Just to mention, I think you referred to EMEA largely. If you look at the last four quarters, we’ve been margins have continued to improve each quarter. Are you still about the whole company? I thought you talked about EMEA. Mark, what are you talking about? Mark? I’ll just give Mark comes out really relative to EMEA. So, I’ll just complete that to say that we do have the juice plant coming into production pretty much early next year. And together with the measures Hilton has indicated I think that we’ll see we’ve sort of got positive about the EMEA improving in margin going forward and whether it can get back to 2021, I’m not sure. So sorry, one was a question about the overall margin and I just sort of focused on EMEA. That’s good.

Thank you. Your next question comes from Peter Grom with UBS.

Thanks, operator. Good afternoon, everyone.

Hey Peter.

I guess, I just wanted to go back to the advanced purchases. I get it’s a lot of moving pieces and the hurricane noise probably makes it harder. But I think back in 2018 when you did the November price increase, you were at that point at least able to estimate the impact from advanced purchases ahead of the price increases. I’m just curious, is there a reason why this time may be different and you’re not able to kind of estimate that? And then just on gross margin, obviously, you would love some perspective on the path from here. You kind of alluded to it here. But can you maybe just talk about what you’re seeing from a commodity perspective and kind of how you see inflation evolving from this point? Thanks.

Okay. Where we want to start. You want to start about commodities or advanced purchases?

Whatever you want.

Okay. All right. We have the option. So, I think the difference this time versus the previous price increase was that we cut off our price increase the favorable price increase mid-October. So with any customer who purchased product after mid-October, they actually paid the higher price. So, as we look at the whole structure, everything that happened in October, it’s really it became a very difficult exercise to determine what, if any of the price increase could have impacted October sales. So, that’s the bottom line. If we could have done a better exercise, we would have, but it became too secured as to try and find a sensible answer. So, we’d rather not give it and we’ll see the impact on the quarter when the quarter is over. And then in commodities, I think everybody knows that what’s happening with aluminium. And I mentioned the extent that we have a ladder approach and we build up that ladder as time goes by. There’s already a tariff on aluminium and we’re hoping that the tariff will not increase, but there is already a tariff on aluminium. And as regards some of our other commodities, we have seen increases in some and we’ve seen decreases in other. We buy a lot of commodities and it’s really it’s going to take us five minutes to go through them all. But what I can say is that generally we are seeing increases and in certain commodities like for example, aluminium, like for example, sugar and there are other commodities that have stayed the same or minimally decreasing. So, the climate that we’re looking at for commodities is one of taking aluminium out of the picture, which is showing significant increases, is one of relatively manageable factors in increases.

Thank you. I would like to turn the conference back over to Mr. Rodney Sacks for any closing remarks.

Thank you. On behalf of Monster, I would like to thank everyone for their continued interest and support of the company. We continue to believe in the company and our growth strategy and remain committed to continuing to innovate, to develop and differentiate our brands and to expand the company both at home and abroad. And in particular, capitalizing on our relationship with the Coca Cola bottler system. We believe that we are well positioned in the beverage industry and continue to be optimistic about the future of our company. We hope that you remain safe and healthy. Thank you very much for your attendance.