Monster Beverage's third-quarter 2026 revenue rose again, but gross profit slipped and operating income fell for a second straight quarter. In its 10-Q for the quarter ended September 30, 2026, filed November 6, 2026, the company reported net sales of $2,563.1 million, up from $2,537.5 million in the second quarter. Gross profit came in at $1,400.7 million, down from $1,419.6 million. The gap between those two movements is the central question for the quarter.
| Line item (as reported) | Q1 2026 | Q2 2026 | Q3 2026 |
|---|---|---|---|
| Net sales | $2,353.3M | $2,537.5M | $2,563.1M |
| Cost of goods sold | $1,059.9M | $1,117.8M | $1,162.3M |
| Gross profit | $1,293.3M | $1,419.6M | $1,400.7M |
| Operating income | $730.0M | $740.4M | $718.7M |
| Income before income taxes | $750.1M | $768.3M | $753.5M |
| Income tax expense | $180.6M | $183.7M | $185.1M |
| Net income | $569.5M | $584.5M | $568.4M |
Sales grew, gross profit did not keep pace
Net sales increased about 1.0% from the second quarter to the third. Gross profit fell about 1.3% over the same span. As a result, gross margin, calculated from the reported figures, moved from roughly 55.9% in the second quarter to roughly 54.7% in the third, after roughly 55.0% in the first quarter.
Over the first three quarters, the picture is steadier. Net sales rose from $2,353.3 million in the first quarter to $2,563.1 million in the third, while gross profit moved from $1,293.3 million to $1,400.7 million. Gross margin for the period did not show a consistent direction: it rose in the second quarter and gave some of that back in the third.
The company did not, in the figures reviewed, attach a quarter-specific explanation to the third-quarter gross margin decline. The most recent full-year discussion available in the company's indexed filings is the fiscal 2025 MD&A. In that report, the company said promotional allowances rose 22.6% to $1.57 billion, or 16.0% of gross billings, and it cited higher promotional allowances among the factors that partly offset its gross margin expansion that year. That is context from a prior year, not a stated cause of the 2026 third-quarter result.
Operating income held in a narrow band, and margins drifted lower
Operating income was $730.0 million in the first quarter, $740.4 million in the second and $718.7 million in the third. Those levels are close together, but they sit on a shrinking margin base. Operating margin, calculated from reported net sales, was roughly 31.0%, 29.2% and 28.0% across the three quarters.
The spread between gross profit and operating income offers one way to see the cost side. Subtracting reported operating income from reported gross profit gives an implied amount for operating costs below gross profit of roughly $563 million in the first quarter, $679 million in the second and $682 million in the third. Most of the increase came between the first and second quarters. From the second quarter to the third, that implied cost base rose by about $3 million while gross profit fell by about $19 million, which accounts for the third-quarter dip in operating income.
Net income and the tax line
Net income was $569.5 million, $584.5 million and $568.4 million in the three quarters. The third quarter's decline came from operating income, partly offset by non-operating income. Under the other non-operating income line tagged in the 10-Q, the company recorded $20.2 million in the first quarter, $27.8 million in the second and $34.8 million in the third. Income before taxes was $753.5 million in the third quarter, down from $768.3 million in the second.
Income tax expense was $180.6 million, $183.7 million and $185.1 million. Measured against pre-tax income, the effective tax rate was roughly 24.1%, 23.9% and 24.6%. The tax line rose modestly in dollar terms in each quarter, and the rate in the third quarter sat above the first two. The company's filing excerpts reviewed here did not include a breakdown of the drivers of that change.
For investors tracking the company, the questions the third-quarter filing raises are specific. Does the gross margin decline reflect pricing, promotional spending, geographic mix or input costs? The reported figures establish the direction of the change but not its cause. Readers who want the company's own explanation should look to the MD&A section of the third-quarter 10-Q, which discusses results in more depth than the summary figures above.