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There's still plenty of sparkle in Hansen Natural (Nasdaq: HANS ) . The longtime rocket stock and more recent Motley Fool Rule Breakers recommendation is showing us how to keep growing when the whole deck seems to be stacked against you.
The energy-drink blender just reported 6.4% year-over-year sales growth with $300 million in second-quarter revenue. Net income jumped 14%, to $0.60 per share, helped along by gross margins widening by 210 basis points, to 53.9%.
Hansen can thank a more efficient distribution network for these gains. The company has transitioned to using Coca-Cola Enterprises (NYSE: CCE ) and Anheuser-Busch InBev bottlers and distributors in most markets, and these partners have done a splendid job of getting Hansen's products out on store shelves. Hansen's Monster Energy drink expanded its market share in North American grocery and convenience channels thanks to this new distribution model, CEO Rodney Sacks reports.
International efforts are starting to take off, too. "Sales continue to progress well in Continental Europe," Sacks said. "Although we got off to a slow start in the United Kingdom, distribution levels and sales are continuing to improve. Sales in Sweden continue to progress well and Spain is off to a good start." There's even a budding Monster movement Down Under, where Hansen managed to "secure extensive distribution" right from the start.
Competition is heating up from the usual suspects. A new offering from Starbucks (Nasdaq: SBUX ) is eating into the Java Monster coffee-based drink line, but Hansen is more than making up for that by kicking sand in the faces of its traditional energy-drink rivals. Monster is growing sales while Coca-Cola's (NYSE: KO ) Rockstar and PepsiCo's (NYSE: PEP ) Amp energy drinks have reported lower sales. Even mighty Red Bull is losing out to the Hansen Monster, according to market reports.
Importantly, there's plenty of room to grow outside Hansen's mainstay American market. Aside from the countries mentioned above, Hansen is about to go into Brazil in a big way. With about 190 million citizens, Brazil is a massive market to secure -- if Hansen plays its cards right. And after Rio and Sao Paulo, I'd like to see Hansen cracking into Japan and the Pacific Rim.
Domestic growth isn't dead, either. Hansen is reaching into entirely new distribution channels now, including Monster displays in Walt Disney (NYSE: DIS ) theme parks. That's fresh sales all around, as the Monster cans sold at Disney World probably replace a Coke or Sprite.
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