Rodney C. Sacks
Chairman and Co-Chief Executive Officer at Monster Beverage
Thank you, Tom. The company achieved record first quarter net sales of $1.9 billion in the 2024 first quarter, 11.8% higher than net sales of $1.7 billion in the 2023 comparable period and 15.6% higher on a foreign currency adjusted basis, 12.6% exclusive of Argentina's impact. Gross profit as a percentage of net sales for the 2024 first quarter was 54.1%, compared with 52.8% in the comparative 2023 first quarter. The increase in gross profit as a percentage of net sales for the 2024 first quarter as compared to the 2023 first quarter was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower input costs, partially offset by geographical sales mix.
Operating expenses for the 2024 first quarter were $485.1 million compared with $412.8 million in the 2023 first quarter. As a percentage of net sales, operating expenses for the 2024 first quarter were 25.5%, compared with 24.3% in the 2023 first quarter. The increase in operating expenses was primarily the result of increased storage and warehouse, increased marketing expenses, increased sponsorship and endorsement and social media expenses as well as increased payroll expenses. Distribution expenses for the 2024 first quarter were $94.4 million, or 5% of net sales compared to $76.3 million or 4.5% of net sales in the 2023 first quarter. Operating income for the 2024 first quarter increased 11.7% to $542 million from $485.1 million in the 2023 comparative quarter.
The effective tax rate for the 2024 first quarter was 23.5%, compared with 20.1% in the 2023 first quarter. The increase in the effective tax rate was primarily attributable to a decrease in the stock-based compensation deduction in the 2024 first quarter as compared to the 2023 first quarter. Net income increased 11.2% to $442 million as compared to $397.4 million in the 2023 comparable quarter. Diluted earnings per share for the 2024 first quarter increased 12% to $0.42 from $0.38 in the first quarter of 2023. The company implemented price increases in the first quarter of 2024 in certain international markets, including highly inflationary markets. We are continuing to monitor opportunities for further pricing actions in both the United States and internationally. The company continues to have market share leadership in the energy drink category for all outlets combined in the United States in both the 13-week and four-week periods ended April 20, 2024.
According to the Nielsen report for the 13 weeks through April 20, 2024, for all outlets combined, namely convenience, grocery, drug, mass merchandisers, sales in dollars in the energy drink category, including energy shots, increased by 3.8% versus the same period a year ago. Sales of the company's energy brands, excluding Bang, were up 0.1% in the 13-week period. Sales of Monster declined 1.4%, sales of Reign were up 16.1%, Sales of NOS increased 4.9% and sales of Full Throttle increased 1.7%. Sales of Red Bull increased 3.6%. According to Nielsen, for the four weeks ended April 20, 2024, sales in dollars in the energy drink category in the convenience and gas channel, including energy shots in dollars, increased 1% over the same period the previous year. Sales of the company's energy brands, excluding Bang, decreased 2.1% in the four-week period in the convenience and gas channel.
Sales of Monster decreased by 3.3% over the same period versus the previous year. Reign sales increased 5.3%, NOS was up 4.5% and Full Throttle was down 0.6%. Sales of Red Bull were up 2.1%. According to Nielsen, for the four weeks ended April 20, 2024, the company's market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, decreased from 36.8% to 35.7% and excluding Bang. Including Bang, the company's market share is 37.3%. Monster share decreased from 30.6% a year ago to 29.3%. Reign's share increased 0.1 of a share point to 3.1%. NOS' share increased 0.1 of a share point to 2.6% and Full Throttle share remained at 0.7%. Bang share was 1.6%. Red Bull share increased 0.4 of a share point to 34.6%. Market share of certain competitors were as follows: CELSIUS 8.5%, C4 3.7%, Five-Hour 3.3%; Rockstar 3% and GHOST 3%.
According to Nielsen, for the four weeks ended April 20, 2024, sales in dollars in the coffee plus energy drink category, which includes our Java Monster line, in the convenience and gas channel decreased 10.7% over the same period the previous year. Sales of Java Monster, including Java Monster 300 and Java Monster Nitro Cold Brew were 3.6% lower in the same period versus the previous year. Sales of Starbucks Energy were 19.5% lower. Java Monster share of the coffee plus energy drink category for the four weeks ended April 20, 2024, was 59.5%, up 4.4 points, while Starbucks Energy share was down 40.1% -- down to 40.1%, down 4.4 points. According to Nielsen, in all measured channels in Canada, for the 12 weeks ended March 23, 2024, the energy drink category increased 10.2% in dollars. Sales of the company's energy drink brands increased 2.9% versus a year ago.
The market share of the company's energy drink brands decreased 2.8 points to 40.3%. Monster sales increased 4.2% and its market share decreased 2.1 points to 36.5%. NOS' sales decreased 6.9% and its market share decreased 0.2 points to 1.1%. Full Throttle sales increased 22.2% and its market share remained at 0.5%. According to Nielsen, for all outlets combined in Mexico, the energy drink category increased 23.1% for the month of March 2024. Monster sales increased 20.2%. Monster's market share in value decreased 0.7 of a point to 29.3% against the comparable period the previous year. Sales of Predator increased 28.6% and its market share increased 0.2 share points to 5.9%. The Nielsen statistics for Mexico cover a single month, which is a short period that may often be materially influenced positively and/or negatively by sales in the OXXO convenience chain, which dominates the market.
Sales in the OXXO 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 15.7% for the month of March 2024. Monster sales increased 26.7%. Monster's market share in value increased 4.2 points to 48.1% compared to March 2023. In Argentina, due in part to the impact of inflation-related local currency price increases, the energy drink category increased 265.9% for the month of March 2024. Monster sales increased 300.2%. The Monster's market share in value increased five points to 58.5% compared to March 2023.
In Chile, the energy drink category decreased 8.4% for the month of March 2024. Monster sales decreased 7.8%. Monster's market share in value increased 0.3 points to 42.9%. Monster Energy remains the leading energy brand in value in Argentina, Brazil and Chile. I would like to point out that 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 until the end of March 2024, Monster's retail market share in value as compared to the same period the previous year grew from 15.5% to 16.2% in Belgium; from 32.8% to 34.2% in France; from 30.8% to 33.1% in Great Britain; from 4.7% to 6.6% in the Netherlands; from 28.3% to 30.3% in the Republic of Ireland; and from 39.9% to 41.3% in Spain.
According to Nielsen, in the 13-week period until the end of March 2024, Monster's retail market share in value as compared to the same period the previous year declined from 34.6% to 32.8% in Norway; from 19.5% to 19% in South Africa; and from 17.9% to 14.7% in Sweden. According to Nielsen, in the 13-week period until the end of February 2024, Monster's retail market share in value as compared to the same period the previous year, grew from 20.4% to 22.6% in the Czech Republic; from 29.3% to 29.9% in Italy; and from 15.9% to 17.2% in Germany. According to Nielsen, in the 13-week period until the end of February 2024, Monster's retail market share in value as compared to the same period in the previous year, remained flat at 18.9% in Poland. Monster's retail market share in value as compared to the same period the previous year declined from 27.6% to 26.7% in Denmark, and from 36.6% to 34.9% in Greece.
According to Nielsen, in the 13-week period until the end of February 2024, Predator's retail market share in value as compared to the same period the previous year, grew from 31.9% to 34.3% in Kenya and from 19.5% to 20.8% in Nigeria. According to IRI, for all outlets combined in Australia, the energy drink category increased 9.5% for the four weeks ending April 7, 2024. Monster sales increased 27.5%. Monster's market share in value increased 2.9 points to 20.3% against the comparable period the previous year. Sales of Mother increased 8% and its market share decreased 0.1 of a share point to 11.1%. According to IRI for all outlets combined in New Zealand, the energy drink category increased 5.2% for the four weeks ending April 7, 2024. Monster sales decreased 0.5%. Monster's market share in value decreased 0.8 of a share point to 14.4% against the comparable period the previous year.
Sales of Mother increased 36.2% and its market share increased 1.5 share points to 6.6%. Sales of Live+ decreased 8.8% and its market share decreased 0.8 of a share point to 5.3%. According to INTAGE, in the convenience channel in Japan, the energy drink category decreased 7.5% for the month of March 2024. Monster sales increased 4.4%. Monster's market share in value increased 6.8 points to 59.5% against the comparable period the previous year. According to Nielsen, all outlets combined in South Korea, the energy drink category increased 11.5% for the month of March 2024. Monster sales increased 1.1%. Monster's market share in value decreased 5.3 points to 51.4% against the comparable period the previous year. We again point out that certain market statistics that cover single months or four-week periods may often be materially influenced, positively and/or negatively by promotions or other trading factors during those periods.
Net sales to customers outside the U.S. were $744.1 million, 39.2% of total net sales in the 2024 first quarter compared to $622.9 million or 36.7% of total net sales in the corresponding quarter in 2023. Foreign currency exchange rates had a negative impact on net sales in U.S. dollars by approximately $64.4 million in the 2024 first quarter, of which $50.4 million related to Argentina. In EMEA, net sales for the 2024 first quarter increased 28.2% in dollars and increased 32% on a currency-neutral basis over the same period in 2023. Gross profit in this region as a percentage of net sales for the 2024 first quarter was 34% compared to 30.7% in the same quarter in 2023. We executed a strategic initiative across EMEA in the first quarter with the launch of Monster Energy Sugar in 27 markets. We are also pleased that in the 2024 first quarter, Monster gained market share in Belgium, Czech Republic France, Germany, Great Britain, Italy, the Netherlands, Norway, the Republic of Ireland and Spain -- sorry, Monster Zero Sugar.
In Asia Pacific, net sales in the 2024 first quarter were flat in dollars and increased 6% on a currency-neutral basis over the same period in 2023. Gross profit in this region as a percentage of net sales for the 2024 first quarter was 42.6% versus 44.4% in the same period in 2023. Net sales in Japan in the 2024 first quarter decreased 2.8% in dollars and increased 7.4% on a currency-neutral basis. In South Korea, net sales in the 2024 first quarter increased 1.2% in dollars and increased 4.3% on a currency-neutral basis as compared to the same quarter in 2023. Monster remains the market leader in Japan and South Korea. In China, net sales in the 2024 first quarter increased 16.4% in dollars and increased 21.2% on a currency-neutral basis as compared to the same quarter in 2023. We remain optimistic about the long-term prospects for the Monster brand in China and are excited about the launch of Predator this year.
In Oceana, which includes Australia, New Zealand, Tahiti, French Polynesia, New Caledonia, Papua New Guinea and Guam, net sales decreased 7.1% in dollars and decreased 3.6% on a currency-neutral basis. In Latin America, including Mexico and the Caribbean, net sales in the 2024 first quarter increased 14.7% in dollars and increased 46.2% on a currency-neutral basis over the same period in 2023, 10.9% exclusive of Argentina's impact. Gross profit in this region as a percentage of net sales was 42.8% for the 2024 first quarter versus 33% in the 2023 first quarter. In Brazil, net sales in the 2024 first quarter increased 32.2% in dollars and increased 25.6% on a currency-neutral basis. Net sales in Mexico increased 32.9% in dollars and increased 19.6% on a currency-neutral basis in the 2024 first quarter. Net sales in Chile decreased 16.3% in dollars and decreased 8.9% on a currency-neutral basis in the 2024 first quarter.
And net sales in Argentina decreased 14.3% in dollars and increased 251.3% on a currency-neutral basis in the 2024 first quarter. We continued with the expanded distribution of the Beast Unleased during the first quarter of 2024, which is now available in 49 states through a network of beer distributors and will be in all 50 states by the end of summer. We have commenced with the rollout of the Beast Unleashed in 24-ounce single-serve cans and are seeing early success while maintaining the base of 16-ounce single-serve cans that were launched last year. We are pleased with the results of the Beast Unleashed and are continuing to expand points of distribution of this brand. Nasty Beast, our new Hard Tea line was launched in 12-ounce variety packs in January 2024, and in 24-ounce single-serve cans in February 2024 and is now available in 49 states.
Early response to the brand has been positive, and we are continuing to focus heavily on expansion of distribution. In the United States in January, we launched Reign Storm, Guava Strawberry and Citrus Zest. In February, we launched Monster Rehab Green Tea, Reignbow Sherbet, Sour Gummy Worm, Monster Juice Rio Punch, Monster Reserve Peaches N' Creme, Monster Java Irish Creme and Monster Energy Ultra Fantasy Ruby Red, and in the latter product, both in a 16-ounce and 12-ounce package. In March, we launched Reign Storm Strawberry Apricot and Mango. In addition to these launches, we continue to innovate in our multipack variety pack offerings. In Canada, during the first quarter, we launched Monster Energy Ultra Strawberry Dreams, Reign Total Body Fuel Cherry Limeade, Monster Reserve Orange Dreamsicle and Monster Rehab Wild Berry Tea.
In Mexico, during the month of January, we launched Monster Energy Zero Sugar and Predator Tropical. In Brazil and Puerto Rico during the month of February, we launched our Monster Energy Zero Sugar. In Oceana, during the first quarter of 2024, we launched two new innovations within Australia. In February, we launched Monster Energy Ultra Strawberry Dreams and Monster Energy Zero Sugar. In EMEA, in the first quarter of 2024, we launched Monster Juiced Monarch, Nitro Cosmic Peach, Reserve Orange Dreamsicle and Ultra Peachy Keen in a number of countries. Additional launches are planned throughout EMEA in 2024. During the first quarter of 2024, we launched Monster Ultra Violet in Japan, Monster Ultra Peachy Keen in Korea, Taiwan and Hong Kong, and Monster Pipeline Punch in China.
During the quarter, we also introduced Predator Gold Strike in the Philippines and Azerbaijan. Last month, we launched a noncarbonated Predator Gold Strike in a 500 ml PET bottle in selected provinces in China. Initial acceptance from retailers and consumers has been positive. During the 2024 first quarter, the company purchased approximately 1.8 million shares of its common stock at an average purchase price of $54.96 per share, for a total amount of $97.2 million, excluding broker commissions. As of May 2, 2024, approximately $642.4 million remained available for repurchase under the previously authorized repurchase programs. The company intends to commence a modified Dutch Auction tender offer for up to $3 billion in value of shares of its common stock, subject to market conditions at a specified price range that is yet to be determined.
The company believes that the tender offer represents an efficient mechanism to permit shareholders the opportunity to obtain liquidity without the potential disruption that can result from market sales. The Company expects to fund the tender offer with approximately $2 billion of cash on hand and approximately $1 billion in combined borrowings, consisting of a new revolving credit facility and a new delayed draw term loan facility, each expected to be consummated prior to the completion of the tender offer. The tender offer will be made outside of the Company's previously authorized repurchase programs and will allow the Company to retain the ability to purchase additional shares through the previously authorized repurchase programs in the future. The Company's co-CEOs, namely Hilton and myself, have indicated that we intend to participate in the offer for investment diversification and estate planning purposes.
My participation in particular, may provide me some flexibility to consider my own potential options, which may also help the Company continue succession planning for its next phase of leadership. In this regard, after consultation with the Company's Board, I am considering reducing my day-to-day management responsibilities starting in 2025, while continuing to manage certain areas of the Company's business for which I have always been responsible. At that time, I intend to remain Chairman of the company's Board and Mr. Schlosberg would segue from Co-CEO to CEO. We estimate that on a foreign currency adjusted basis, including the alcohol brand segment, April 2024 sales were approximately 12.9% higher than the comparable April 2023 sales and 14.9% higher than April 2023, excluding the alcohol brands segment.
Excluding Argentina's impact, we estimate that on a foreign currency adjusted basis, including the alcohol brand segment, April 2024 sales were approximately 11.5% higher than the comparable April sales and 13.5% higher than April 2023, excluding the alcohol brand segment. We estimate April 2024 sales, including the alcohol brands segment to be approximately 10% higher than in April 2023 and 11.9% higher than in April 2023, excluding the alcohol brand segment. April 2024, we had two more selling days compared to April 2023. In this regard, we caution again that sales over a short period are often disproportionately impacted by various factors such as, for example, selling days, days of the week in which holidays fall, timing of new product launches and the timing of price increases and promotions in retail stores, distributor incentives as well as shifts in the timing of production.
In some instances, our bottlers are responsible for production and determine their own production schedules. This affects the dates on which we invoice such bottlers. Furthermore, our bottling and distribution partners maintained inventory levels according to their own internal requirements which they may alter from time to time for their own business reasons. We reiterate that sales over a short period such as a single month should not necessarily be imputed to or regarded as indicative of results for a full quarter or any future period. In conclusion, I would like to summarize some recent positive points. The energy category continues to grow globally. We are pleased to report that our pricing actions have not significantly impacted consumer demand. Our AFF flavor facility in Ireland is now providing a larger number of flavors to our EMEA region, enabling better service levels and lower landed costs to our EMEA region.
We are in the process of constructing a juice facility at our AFF flavor facility in Ireland. We have a robust innovation plan for 2024. Beast Unleashed is performing to expectations. We're excited for Nasty Beast Hard Tea as well as the additional alcohol opportunities that Monster Brewing Company presents. Initial acceptance from retailers and consumers has been positive. We are pleased with the rollout of Predator and Fury, our affordable energy drink portfolio in a number of markets internationally, including the launch last month of Predator in a noncarbonated formula in 500 ml PET bottles in selected provinces in China.
We are proceeding with plans for further launches of our affordable energy brands. We are excited about the opportunities that the acquisition of the Bang Energy brand presents to us and believe that the brand will fit well within our broader portfolio of energy drink brands. The company achieved record first quarter net sales of $1.9 billion in the 2024 first quarter, 11.8% higher than net sales of $1.7 billion in the 2023 comparable period and 15.6% higher on a foreign currency adjusted basis, or 12.6% exclusive of our Argentina's impact.
I would now like to open the floor to questions about the quarter. Thank you.
