On March 11, Hansen announced a $200 million stock repurchasing program, which was followed a week later by rumors of a takeover by Coca-Cola. On March 18, an analyst from Stifel Nicolaus, with "no knowledge of any M&A negotiations," wrote a report speculating on Coke's potential interest in acquiring Hansen. The report was prompted by Coke's recent acquisition of Coca-Cola Enterprise's North American operations, and since the company already distributes Hansen's products, purchasing the company would immediately add to Coke's profits. These two events supported an eight day rally during which time Hansen's stock increased by more than $1.
A Longbow Research analyst downgraded HANS to neutral, citing weak domestic revenue growth. Additionally, he wrote that European markets won't help HANS' bottom line until 1Q2010 at the very earliest.
HANS announced a fall in year over year sales as a result of weaker overseas sales and problems with its new distribution system. Although April sales gained 12% versus year earlier figures, a distribution disruption left shelves empty in several key markets. Additionally, the company's Java Monster product is facing increased competition in the coffee energy drink market.
Despite revenue growing 3% on the quarter and 14% on the year, a one time charge of $118 million related to distribution changes turned Hansen's Q4 into a $28 million loss. Annual earnings dropped 28% to $108 million.
Hansen said profit in the third quarter rose 15% as Monster sales continued to grow despite an increasingly shaking economy and slowing consumer spending. Sales rose to $285 million from $247.2 million as sales of Monster and Java Monster drinks saw 17% growth.
Hansen Natural Corp posted a higher quarterly profit, but failed to match Wall Street sales growth expectations, sending its market value down by a little under a quarter.
Goldman Sachs downgraded its rating for Hansen Natural Corporation and removed the stock from its preferred portfolio list. Hansen has a good fundamental outlook, however the stock is considered to be expensive for a consumer/retail stock. This resulted in a decline in the Hansen stock in the pre-market trading.