Key Takeaways
- Shares of CELH plummeted over 16% in premarket hours following a disappointing Q2 earnings report
- The company reported adjusted earnings per share of $0.36, falling short of the $0.43 Wall Street consensus by $0.07
- Quarterly revenue reached $817.9M but missed analyst projections of $885.98M, although it represented an 11% increase from the prior year
- The flagship Celsius brand experienced an 11.7% year-over-year revenue decline during the quarter
- The Alani Nu brand emerged as a strong performer, posting impressive retail sales growth of 55.7% compared to last year
Shares of Celsius Holdings (CELH) plummeted over 16% during Thursday’s premarket session following the release of second-quarter financial results that disappointed investors, with both earnings and revenue figures coming in below analyst expectations.
The stock exchanged hands at approximately $24.27 in premarket activity, representing a significant retreat from its 52-week peak of $66.74.
The company delivered adjusted earnings per share of $0.36, undershooting the Street’s $0.43 expectation by seven cents. Total revenue reached $817.9 million, falling short of the anticipated $885.98 million, although the top-line figure marked an 11% year-over-year increase from $739.3 million in the comparable quarter.
Adjusted EBITDA declined 12% from the prior year to $184.2 million, which also trailed the Street’s projection of $198.4 million.
The core Celsius brand faced headwinds throughout the quarter. Sales decreased 11.7% year-over-year, pressured by elevated trade and promotional expenditures, shipment timing related to inventory rebalancing efforts, weakness in club channels, and SKU rationalization efforts stemming from recent acquisition integration activities.
At the retail level, Celsius brand sales declined 2% during the period, while Rockstar Energy experienced a 13% decrease.
Alani Nu Delivers Strong Performance
The Alani Nu brand emerged as the portfolio’s star performer. This brand produced $364.4 million in quarterly sales, driven by robust consumer appetite and heightened order volumes as it completed its integration into the PepsiCo (PEP) distribution network.
Alani Nu’s retail sales surged 55.7% on a year-over-year basis. The brand’s performance received an additional boost from its limited-edition Purple Cotton Candy flavor launch during the quarter.
The Rockstar Energy brand contributed $66.5 million in quarterly revenue.
Gross profit margin compressed to 48.1%, compared with 51.5% in the year-ago period. Management cited intensified promotional spending and unfavorable channel mix as primary factors, with rising aluminum costs creating additional margin pressure.
Overseas Markets Continue Expansion
Revenue from international markets advanced 10% to $27.2 million, propelled by strong performance in Nordic regions and growth in recently entered markets such as the United Kingdom, Ireland, France, and Australia.
North American revenue increased 11% to reach $790.7 million.
Chief Executive Officer John Fieldly emphasized the company’s market position. “With two billion-dollar brands and roughly one in five energy drinks sold in the United States coming from our portfolio, we are a key growth engine for the category,” he stated.
The company’s brand portfolio commanded approximately 20.1% dollar share of the U.S. ready-to-drink energy beverage category throughout the quarter.
CELH also accounted for approximately 30% of the $640 million expansion in the zero-sugar U.S. energy category during this timeframe.
PepsiCo, which maintains an 11% ownership stake in CELH, registered a modest 0.5% gain in premarket trading following the earnings announcement.
At the time of publication, CELH shares were changing hands around $24.27 in premarket trading, considerably below the stock’s 52-week high.
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