Why Monster Beverage’s Margins Contracted in 1Q18

This decline was caused by higher promotional allowances as a percentage of gross sales and the $9.9 million of commissions accounted as a reduction to net sales due to the adoption of the new accounting standard mentioned in part three of this series. Also, an unfavorable geographical sales mix resulting from a higher proportion of foreign sales adversely impacted the company’s gross margin. The company’s foreign operations generally carry a lower gross margin.