Rodney Cyril Sacks
Chairman and Co-Chief Executive Officer at Monster Beverage
Thanks, Tom. The energy drink category in the United States and in certain other countries experienced lower growth rates in the second quarter. Retailers have reported a reduction in convenience store foot traffic and we have seen a shift in retail towards more mass and dollar channels. Other beverage and consumer packaged product companies have also seen a tighter consumer spending environment and weaker demand in the quarter. The energy category globally continues to grow and has demonstrated resilience as we believe that consumers view energy drinks as an affordable luxury. We believe that household penetration continues to increase in the energy drink category.
Growth opportunities in household penetration per capita consumption, along with consumers' need for energy or positive factors for the category. We continue to expand ourselves in non-Nielsen measured channels. The company achieved record second quarter net sales of $1.9 billion in the 2024 second quarter or 2.5% higher than net sales of $1.85 billion in the comparable 2023 quarter, 6.1% higher on a foreign currency adjusted basis, 4.3% exclusive of Argentina's impact. Net sales on a foreign currency adjusted basis, excluding the alcohol brands segment increased 7.4% in the 2024, second quarter.
Gross profit as a percentage of net sales for the 2024 second quarter was 53.6% compared with 52.5% in the 2023, second quarter. The increase in gross profit as a percentage of net sales for the 2024 second quarter as compared to the 2023 second quarter was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower aluminum can costs partially offset by production inefficiencies. On a sequential quarterly basis, gross margins were 0.5% below 2024 first quarter margins, primarily as a result of higher allowances certain of which we believe are nonrecurring as well as production inefficiencies. Operating expenses for the 2024 second quarter were $492.3 million, compared with $450.4 million in the 2023 second quarter.
The increase in operating expenses were primarily the result of increased sponsorship and endorsement expenses, increased payroll expenses and increased storage and warehouse expenses. As a percentage of net sales, operating expenses for the 2024 second quarter were 25.9%, compared to 24.3% in the 2023 second quarter. Distribution and warehouse expenses for the 2024 second quarter were $87.4 million or 4.6% of net sales compared to $82 million or 4.4% of net sales in the 2023 second quarter. Operating income for the 2024 second quarter increased 0.6% to $527.2 million from $523.8 million in the 2023 comparative quarter. The effective tax rate for the 0.6%, 2024 second quarter was 22.9% compared to 23.2% in the 2023 second quarter.
Net income increased 2.8% to $425.4 million as compared to $413.9 million in the 2023 comparable quarter. Diluted earnings per share for the 2024 second quarter increased 5% to $0.41 from $0.39 in the second quarter of 2023. As previously reported, we will be taking an approximately 5% price increase on our core brands and packages effective November 1, 2024, in the United States. We are continuing to monitor opportunities for further pricing actions. 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 July 2, 2024.
According to the Nielsen reports for the 13 weeks through July 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 0.6% versus the same period a year ago. Sales of the company's energy brands, excluding Bang were down 2.5% in the 13-week period. Sales of Monster declined 3%. Sales of Reign were down 0.5%. Sales of NOS increased 4.1% and sales of Full Throttle decreased 6.9%. Sales of Red Bull increased 1.7%. According to Nielsen, for the four weeks ended July 20, 2024, sales in dollars in the energy drink category, in the convenience and gas channel, including energy shots in dollars, decreased 2.2% over the same period the previous year. Sales of the company's energy brands, excluding Bang, decreased 4.8% in the four-week period in the convenience and gas channel. Sales of Monster decreased by 5.4% over the same period versus the previous year. Reign sales decreased 3.8% and NOS was up 2.6% and Full Throttle was down 8.6%. Sales of Red Bull were up 0.7% or 0.8% [Phonetic].
According to Nielsen, for the four weeks ended July 2024, the company's market share of the energy drink category in the convenience and gas channel, including energy shots in dollars, decreased from 35.7% to 34.7%. Excluding Bang -- including Bang, the company's market share is 36.7%. Monster share decreased from 29.4% a year ago to 28.5%. Reigns share rains decreased 0.1 of a share point to 3%, NOS 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% and Red Bull share increased 1 share point to 35.9%.
Market share of certain competitors were as follows. CELSIUS 7.9%, C4 3.5%, 5-hour 3.3%; Rockstar 3% and GHOST 3%. According to Nielsen, for the four weeks ended July 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 11.2% over the same period the previous year. Sales of Java Monster including Java Monster 300 and Java Monster Nitro Cold Brew was 5.6% lower in the same period versus the previous year. Sales of Starbucks Energy were 17.9% lower. Java Monster share of the coffee plus energy drink category for the four weeks ended July 20, 2024, was 57.4%, up 3.4 points, while Starbucks Energy share was 42.2%, down 3.5 points.
According to Nielsen, in all measured channels in Canada, for the 12 weeks ended July 30, 2024, the energy drink category increased 6.8% in dollars. Sales of the company's energy drink brands increased 2.1% versus a year ago. The market share of the company's energy drink brands decreased 1.8 points to 40.2%. Monster sales decreased 1.2% and its market share decreased 2.8 points to 34.7%. NOS' sales increased 17.4% and its market share increased 0.1 point to 1.3%. Full Throttle sales increased 66.9% and its market share increased 0.2 or 2.5 [Phonetic] of 8%.
According to Nielsen, for all outlets combined in Mexico, the energy drink category increased 20.3% for the month of June 2024. Monster sales increased 18.1%, Monster's market share in value decreased 0.5 point to 28.2% against the comparable period the previous year. Sales of Predator increased 21.8% and and its market share increased 0.1 of a share point to 6%. The Nielsen statistics for Mexico cover single months, which is a short period that may often be materially influenced positively and/or negatively ourselves 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 19.1% and for the month of June 2024. Monster sales increased 29.1%, Monster's market share in value increased 3.7 points to 48.1% compared to June 2023. In Argentina, due in part to the impact of inflation-related local currency price increases. The energy drink category increased 301.3% for the month of June 2024. Monster sales increased 320.2%. Monster's market share in value increased 2.6 points to 58.1% compared to June 2023.
In Chile, the energy drink category increased 0.8% for the month of June 2024. Monster sales increased 1.4%, Monster's market share in value increased 0.2 point to 41.1%. Monster Energy remains the leading energy brand in value in Argentina, Brazil and Chile. I'd 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 ending July 14, 2024, Monster's retail market share in value as compared to the same period the previous year, grew from 16.6% -- 16.1% to 16.4% in Belgium, from 30.8% to 33.5% in Great Britain and from 5.5% to 6.8% in the Netherlands. According to Nielsen, in the 13-week period ended July 14, 2024, Monster's retail market share in value as compared to the same period the previous year declined from 32.6% to 31% in France from 31% to 29.5% in Norway, and from 40.8% to 40.6% in Spain.
According to Nielsen, in the 13-week period ending June 30, 2024, Monster's retail market share in value as compared to the same period the previous year grew from 16.4% to 17.3% in Germany. According to Nielsen, in the 13-week period ending June 30, 2024, Monster's retail market share in value as compared to the same period the previous year declined from 31.5% to 30.6% in Italy and from 18.2% to 17.7% in South Africa. According to Nielsen, in the 13-week period ending June 16, 2024, Monster's retail market share in value as compared to the same period the previous year, grew from 30.4% to 30.9% in the Republic of Ireland. According to Nielsen, in the 13-week period ending June 16, 2024, Monster's retail market share in value as compared to the same period the previous year declined from 22.1% to 21.4% in the Czech Republic and from 16% to 14.3% in Sweden.
According to Nielsen, in the 13-week period ending May 31, 2024, Monster's retail market share in value as compared to the same period of the previous year, grew from 18.8% to 18.9% in Poland. According to Nielsen, in the 13-week period ending May 19, 2024, Monster's retail market share in value as compared to the same period the previous year declined from 28% to 27.3% in Denmark and from 37.5% to 34.7% in Greece. According to Nielsen, in the 13-week period ending May 31, 2024, [Indecipherable] retail market share in value as compared to the same period the previous year grew from 32.3% to 37.2% in Kenya and from 19.6% to 21.9% in Nigeria.
Combining our markets in EMEA for the last 13 weeks, the energy category has grown 10.5%. Of note, for the same period, the category in Great Britain grew 1.9% in Germany, 9.9% in France, 11.4% in Ireland, 6.1% in Spain, 2.4% and in South Africa, 4.6%. According to IRI, for all outlets combined in Australia, the energy drink category increased 10.8% for the four weeks ending July 14, 2024. Monster's sales increased 24.9%. Monster's market share in value increased 2.2 points to 19.1% and against the comparable period the previous year. Sales of Mother increased 7.2% and its market share decreased 0.4 share points to 10.7%.
According to IRI, for all outlets combined in New Zealand, the energy drink category increased 6.1% for the four weeks ending July 7, 2024. Monster sales decreased 3.7%. Monster's market share in value decreased 0.3 of a share point to 14.6% against the comparable period the previous year. Sales of Mother increased 12.8% and its market share increased 0.3 of a share point to 5.7%. Sales of Live+ decreased 1.9% and its market share decreased 0.4 of a share point to 5.2%.
According to INTAGE, in the convenience channel in Japan, the energy drink category decreased 5.2% for the month of June 2024. Monster sales increased 4.2%, and Monster's market share in value increased 5.5 points to 60.6% against the comparable period the previous year. According to Nielsen, for all outlets combined in South Korea, the energy drink category increased 16.6% for the month of June 2024. Monster's sales increased 5.4% and Monster's market share in value decreased 5.6 points to 52.1% against the comparable period the previous year. We again quote [Phonetic] 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 $746 million, 39.3% of total net sales in the 2024 second quarter compared to $715.4 million 38% of total net sales in the corresponding quarter in 2023.
Foreign currency exchange rates had a negative impact on net sales in the U.S. by approximately $67.7 million in the 2024 second quarter, of which $34 million related to Argentina. In EMEA, net sales in the 2024 second quarter increased 2.8% in dollars and increased 8.7% 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 second quarter was 34.7% compared to 34% in the same quarter in 2023.
Net sales in EMEA decreased by approximately 3.2% in the 2024 second quarter due to supply, chain issues in Germany caused by production capacity and distribution constraints. We continued to execute our strategic initiative across EMEA in the second quarter with the launch and rollout of Monster Zero Sugar, which is now in 32 markets. We are also pleased that in 2024 second quarter, Monster gained market share in Belgium, Germany, Great Britain, the Netherlands, Poland and the Republic of Ireland.
In Asia Pacific, net sales in the 2024 second quarter decreased 1.2% in dollars and increased 5.8% 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 second quarter was 45.4% and versus 42.4% in the same period in 2023. Net sales in Japan in the 2024 second quarter decreased 11.8% in dollars and increased 0.4% on a currency-neutral basis. In South Korea, net sales in the 2024 second quarter decreased 16.9% in dollars and decreased 14.3% on a currency-neutral basis as compared to the same quarter in 2023, largely due to the timing of production schedules this year. Monster remains the market leader in Japan and South Korea.
In China, net sales in the 2024 second quarter increased 25.6% in dollars and increased 31.2% 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 recent launch of Predator, which is being rolled out to additional markets in China over this year and 2025. In Oceania, which includes Australia, New Zealand, Tahiti, French Polynesia, New Caledonia, Papua New Guinea and Guam, net sales increased 2.9% in dollars and increased 4.7% on a currency-neutral basis. In Latin America, including Mexico and the Caribbean, net sales in the 2024 second quarter increased 14.1% in dollars and increased 39% on a currency-neutral basis over the same period in 2023, 14.9% exclusive of Argentina's impact.
Gross profit in this region as a percentage of net sales was 45.8% for the 2024 second quarter versus 30.9% in the 2023 second quarter. In Brazil, net sales in the 2024 second quarter increased 33.2% in dollars and increased 37.4% on a currency-neutral basis. Net sales in Mexico increased 22.6% in dollars and increased 13.7% on a currency-neutral basis in the 2024 second quarter. Net sales in Chile decreased 28.1% in dollars and decreased 14.7% on a currency-neutral basis in the 2024 second quarter due to challenging economic conditions in the country. Our market share in the quarter increased to 41.3% plus 0.2 of a share point in the month June, our share was 41.1%.
Net sales in Argentina decreased 29.5% in dollars and increased 172.9% on a currency-neutral basis in the 2024 second quarter. We remain the market leader in Argentina at 57.7% share and gained 2.4 share points in the second quarter. Monster Brewing had a challenging second quarter. Net sales for the alcohol brands segment were $41.6 million in the 2024 second quarter a decrease of approximately $19.5 million or 31.9% lower than 2023 comparable quarter. We have recently appointed a new President of Monster Brewing and are continuing to consolidate production facilities to maximize efficiencies.
During the quarter, we took a write-down of approximately $8.1 million relating to certain brewery closures. The Beast Unleased is now available in 50 states through a network of beer distributors after the launch in the state of July and July [Indecipherable] to in July. We expanded the Beast Unleased into 24-ounce single-serve cans in the first half of the year. We are currently launching a second variety pack of the Beast Unleased in a 12-pack of slim 12-ounce cans in four flavors. Mean Green, Pink poison, Gnarly Grape and Killer Sunrise. Nasty Beast, our new hard tea line was launched in the 2024 first quarter and is now available in 49 states.
In the United States, we are preparing for the launch of Monster Energy Ultra Vice Guava in October 2024. In Canada, during the month of April, we launched Monster Zero Sugar and Reign Storm in four flavors. Additionally, in the month of June, we launched Bang Energy in four flavors. In Latin America, during the second quarter of 2024, we launched Monster Zero Sugar in Argentina, Ultra Paradise in Colombia, Monster Juice Pipeline Punch in Guatemala, Ultra Paradise in Ecuador and Reserve White Pineapple in Nicaragua.
In New Zealand, during the month of April, we launched Monster Energy Ultra Strawberry Dreams. And in May, we launched Monster Energy Zero Sugar.
In EMEA, in the second quarter of 2024, we launched Monster Juiced Aussie Lemonade, Juiced Bad Apple, Ultra Gold and Pineapple and Ultra Peachy Keen, Ultra Rosa and Ultra Strawberry Dreams in a number of countries. In the EMEA in the second quarter of 2024, we also launched [Indecipherable] Punch, Burn Guava, Burn Punch, Rain Mango Magic and Nalu Yuzu Rosemary Lemonade in a number of countries. We launched our new clean energy brand, Reign Storm, with three SKUs, Valencia Orange, Kewi Blend and Peach Nectarine in Great Britain and Sweden in the second quarter. Additional launches are planned across all brands throughout EMEA in 2024.
During the second quarter of 2024, we launched Monster Ultra Violet and Papillon in Japan. And Peachy Keen and Aussie Lemonade in Korea. In China, Predator Goldstrike, which was launched in selected provinces of China at the end of April 2024, continues meeting expectations being incremental to Monster and will be launched in additional provinces by year-end.
In India, Predator Gold Strike in a PET format which was launched as a test in one region at the end of 2023 is also meeting expectations. We are planning to launch that pack format in additional regions in India later this year. We remain optimistic about the long-term prospects for the Monster brand in China and India and are excited about the expansion of Predator in these two countries.
On June 10, 2024, the company announced the final results of its modified Dutch auction tender offer, which expired on June 5, 2024. The company accepted for purchase approximately 56.6 million shares of common stock at a purchase price of $53 per share for an aggregate purchase price of approximately $3 billion excluding fees and expenses related to the tender offer. In addition, during the three months ended June 30, 2024, the company repurchased approximately 2.2 million shares over common stock at an average purchase price of $49.55 per share for a total consideration of approximately $107.7 million, excluding broker commissions. Subsequent to June 30, 2024, the company repurchased approximately 3.9 million shares of its common stock at an average purchase price of $49.59 per share for total consideration of approximately $192.2 million, excluding broker commissions.
As of August 6, 2024, approximately 342.4 million shares remained available for purchase -- sorry, $342 million remained available for purchase under the previously authorized repurchase program. We estimate that July 2024 sales were approximately 5.9% higher than the comparable July 2023 sales and 6.1% higher than July 2023, excluding the alcohol brand segment. We estimate that on a foreign currency adjusted basis, including the alcohol brands segment July 2024 sales were approximately 9.4% higher than the comparable July sales and 9.6% higher than July 2023, excluding the alcohol brands segment. July 2024 had two more selling days compared to July 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 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 in which we invoice such bottlers. Furthermore, our bottling and distribution partners maintain 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 believe that household penetration continues to increase in the energy drink category. Growth opportunities in household penetration per capita consumption along with consumers' need for energy or positive factors for the category. We continue to expand our sales in non-Nielsen measured channels. We are pleased to report that our pricing actions have not significantly impacted consumer demand. As reported earlier, we are planning a price increase in the United States on our core brands and packages effective November 1, 2024.
We continue to review opportunities for price increases internationally. Our AFF flavor facility in Ireland is now providing a large 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, which we anticipate will be completed later this year. We're excited for the launch of Monster Energy Ultra Vice Guava in October 2024. Monster Brewing continues to provide opportunities within the alcohol brand segment. We're excited about the opportunities that the acquisition of the Bang Energy brand presents to us and believe that the brand fits well within our broader portfolio of energy drink brands.
We are pleased with the rollout of Predator and Fury, our affordable energy drink portfolio in a number of markets internationally. We are proceeding with plans for further launches of our affordable energy brands.
I would like to now open the floor to questions about the quarter. Thank you.
