Will Strategic Pricing Shield Monster Beverage From Rising Costs?

Monster Beverage Corporation MNST is leveraging disciplined pricing actions and supply chain efficiencies to protect margins amid rising input costs. In the third quarter of 2025, gross margin expanded to 55.7% from 53.2% a year earlier, supported by pricing initiatives and a favorable product mix that helped offset higher aluminium can costs and increased promotional spending.Management acknowledged that cost pressures remain, particularly from higher aluminum costs, driven by tariff-related increases in the Midwest premium. While tariffs had only a modest impact in the third quarter, Monster Beverage expects some continued pressure into the fourth quarter of 2025 and early 2026.To counter these headwinds, Monster Beverage implemented U.S. pricing changes effective from Nov. 1, 2025, including frontline price increases and reduced promotional allowances by package and channel. The company’s pricing framework incorporates consumer purchasing patterns, brand strength, channel dynamics and packaging mix to optimize revenue, while maintaining demand.Monster Beverage’s pricing strategy is not a blunt, across-the-board increase. Management emphasized a disciplined revenue growth management framework that balances rate, trade spend, package mix and channel mix, while closely monitoring consumer elasticity. The company expects minimal volume impact from these actions, citing the energy drink category’s strong value proposition and the relatively modest pace of price increases compared with other non-alcoholic beverages. This pricing discipline is further supported by robust category growth and strong brand momentum, particularly within the Ultra family and zero-sugar offerings, which also benefit margins through a favorable mix. Combined with ongoing supply chain investments and optimization efforts, Monster Beverage’s strategic pricing appears well-positioned to absorb rising input costs while sustaining profitability. Overall, while cost inflation remains a risk, Monster Beverage’s measured and data-driven pricing strategy should help shield margins and support earnings growth in the periods ahead.The Zacks Rundown for MNSTIn the past six-month period, MNST’s shares have gained 38.8% compared with the industry’s growth of 11.9%. MNST presently carries a Zacks Rank #2 (Buy).Image Source: Zacks Investment ResearchFrom a valuation standpoint, MNST trades at a forward price-to-earnings ratio of 33.86X, higher than the industry’s average of 18.20X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for MNST’s current and next year earnings implies a year-over-year rise of 22.8% and 15.2%, respectively.Image Source: Zacks Investment ResearchTop-Ranked Stocks to ConsiderThe Simply Good Foods Company SMPL, a consumer-packaged food and beverage company, engages in the development, marketing, and sale of snacks and meal replacements, and other products in North America and internationally. SMPL currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Simply Good Foods' current fiscal-year sales implies a decline of 0.3%, and the same for current fiscal-year earnings implies growth of 1.6% from the year-ago reported figures. SMPL delivered a trailing four-quarter earnings surprise of 5.53%, on average.Kimberly-Clark Corporation KMB manufactures and markets personal care products in the United States. KMB currently carries a Zacks Rank #1.The Zacks Consensus Estimate for Kimberly-Clark's current fiscal-year sales and earnings implies a decline of 2.1% and 6.2%, respectively, from the year-ago actuals. KMB delivered a trailing four-quarter earnings surprise of 18.9%, on average.Medifast, Inc. MED operates as a health and wellness company that provides habit-based and coach-guided lifestyle solutions to address obesity and support a healthy life in the United States. MED currently carries a Zacks Rank #2.The Zacks Consensus Estimate for Medifast's current fiscal-year sales and earnings implies a decline of 36.7% and 156.5%, respectively, from the year-ago actuals. MED delivered a trailing four-quarter negative earnings surprise of 640%, on average.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kimberly-Clark Corporation (KMB): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report MEDIFAST INC (MED): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks