Bonnie Herzog: Thank you and congratulations to you both, I guess, pending Rodney’s decision. I have a question on your U.S. sales growth in the quarter, which was I guess a decent step down. And it sounds like your business is maybe slowing month-to-month during the quarter and then a little bit in April. So could you touch on what’s driving the slowdown, really for the entire category? I guess I’m also curious about this in light of your robust innovation pipeline and I think shelf space gains. And then you mentioned that you continue to grow your sales in non-Nielsen measured channels. So first, could you just maybe clarify how your sales are performing on your end in the measured channels? And then could you give us a sense of what percentage of your business is now in non-measured channels? I guess in the U.S.? Thanks.
Rodney Sacks: So, Bonnie, we don’t report what percentage of our sales is done in the non-measured channels. So, it’s hard for me to give an answer to that since we don’t report it, but it’s something we can consider doing in the future. But our non-measured channels remain strong. And as you know, we have a bunch of really important customers in that category, including FSOP, Food Service On-Premise. We have, one of the big club store chains is, in that non-measured channel. We have Home Depot, Lowe’s, Amazon. So we do have a bunch of customers that operate in those non-measured channels. And you can see the discrepancy between the Nielsen numbers and what we report as a company because A, the Nielsen numbers are sales to consumers.
We report on sales to bottlers and our direct customers and we also, include sales to non-measured channels. And then I just actually wanted to get back to a previous question where it was asked whether that price increase that we referred to would be across the whole portfolio. And when we look at the portfolio in the U.S., we have a number of different product lines, but the reference to the price increase will be on the main Monster Energy line and possibly some of the others, but that also has not been clarified as of yet.
Operator: Our next question comes from Kaumil Gajrawala of Jefferies. Please go ahead.
Kaumil Gajrawala: Hi, can I try maybe following up on Bonnie’s question a little bit more, is it at least from the data and stuff that we’re seeing, it sounds like there is maybe more of a slowdown than perhaps what you’re seeing or how you’re feeling about the category itself. And just if you could dig into, is that accurate and if so, what you think might be happening?
Rodney Sacks: Let’s talk a little bit. There clearly has been a slight slowdown. I mean, I think that you guys have follow a lot of the consumer product companies, both beverage and non-beverage. And I think that there is including a lot of the convenience chains who report as well. And I think there has been a report generally across the board there is some slowdown. I think you’ve got to take it into, take into account that last year there was a lot of acceleration, there were increased sales. So you’re looking, look at it on a two-year basis as well. But there is some, there is some softness. We think that inflation and high gas prices are having an effect on the number of consumers that are going into the stores, traveling.
And so I think that is something I think we’re sort of industry wide are experiencing. We think that, things will, will pick up. We think that, you know, summer’s coming, but that has been something you’ve noticed. And you guys see that, you read the Nielsen’s as we do. But we also look to other channels to look at increased sales. And you know, through the other channel business, we have continued to have healthy sales and obviously we are introducing a lot of innovation that’s getting listings now. So we are looking positive to how that will implement our sales going forward.
Operator: The next question comes from Michael Lavery of Piper Sandler. Please go ahead.
Michael Lavery: Thank you. Good evening. Can you just give us an update on Bang and just some of your thinking on how it’s progressing and specifically maybe some of the marketing activation or distribution momentum and what we might expect for plans for the rest of the year?
Rodney Sacks: So if you look at Bang and look at the latest four weeks, you’ll see that sales are starting to accelerate. And mainly because we’ve been able to get listings as we move through to this season of listings in the chains. As you know, the brand was discontinued for a number of reasons last year and it’s been a real impetus to get the brand up and running. We believe it has and we believe it’s moving positively. The marketing for the brand is, has really been a low ebb and it’s gaining momentum as we move into the summer. We’re in the process of accelerating and I’m going to careful what I say, but a large influencer platform to help move and accelerate the brand. So the marketing is underway. It’s just taking a little bit of time to get it up and moving.
As I said earlier or said in previous calls, it’s positioned as a lifestyle brand and we believe that to we have to invest the market. We accept that, and to achieve the positioning that we’re looking for.
Operator: The next question comes from Peter Galbo from Bank of America. Please go ahead.
Peter Galbo: Hey, guys. Good afternoon. Thanks for taking the question. Maybe just actually wanted to ask not on the gross margin line, but on some of the operating expense lines, I mean, there’s been quite a sizable build, I think, in some of those numbers and certainly ahead of, I think, what the street had. I’m just curious, is there any timing shift there or is there any build in terms of the, I don’t know, distribution expense ahead of either shelf resets or Bang rolling out more significantly? Just kind of want to understand how you’re thinking about that going forward. Thanks.
Rodney Sacks: Well, on the one hand, we took a conscious decision to build up inventories. So in doing so, we really had this objective of satisfying demand, which we really did not do very well at in previous years. So we have significant inventories now. And we, in stock rates are climbing in the 95 plus percent levels, so we’re able to service much better. But obviously there’s a cost to it. And, freight, as you know, has gone up, and so that’s one factor. Warehousing has gone up, so that’s one factor in the operating expenses. There’s nothing that’s really tied to any particular period. These are all expenses that were incurred within the quarter and they reported as being the quarter. Sponsorships are up, it’s payroll is up, so there’s a bunch of, and you’ll see it in more effectively in the queue, the number of cost items that are up.
