Key Takeaways
- CELH shares plummeted over 16% in premarket hours following disappointing Q2 financial results
- The company reported adjusted EPS of $0.36, falling short of the $0.43 analyst consensus by $0.07
- Total revenue reached $817.9M but missed projections of $885.98M, though it represented an 11% increase from the prior year
- Core Celsius brand revenue declined 11.7% compared to the same quarter last year
- The Alani Nu brand delivered impressive performance with retail sales jumping 55.7% year-over-year
Shares of Celsius Holdings (CELH) plummeted over 16% during premarket hours Thursday following the beverage company’s second-quarter earnings report, which disappointed investors with misses on both earnings per share and revenue metrics.
The energy drink maker’s shares traded near $24.27 in premarket activity, representing a significant decline from its 52-week peak of $66.74.
The company delivered adjusted earnings per share of $0.36, falling short of Wall Street’s $0.43 expectation by seven cents. Total quarterly revenue reached $817.9 million, missing analyst projections of $885.98 million, although the figure marked an 11% improvement compared to $739.3 million reported during the corresponding quarter of the previous year.
The company’s adjusted EBITDA decreased 12% year-over-year to $184.2 million, falling below the consensus estimate of $198.4 million.
The flagship Celsius brand experienced challenging market conditions during the quarter. Revenue declined 11.7% compared to last year, pressured by elevated trade and promotional expenditures, shipping timing related to inventory rebalancing efforts, weakness in warehouse club channels, and SKU rationalization following recent acquisition integration activities.
Retail sales for the Celsius brand decreased 2% during the period, while Rockstar Energy experienced a 13% decline.
Alani Nu Delivers Strong Growth
The Alani Nu brand emerged as the clear winner within the company’s product portfolio. This brand delivered $364.4 million in quarterly sales, powered by robust consumer appetite and elevated order volumes as the brand integrated into the PepsiCo (PEP) distribution network.
Alani Nu’s retail sales surged 55.7% year-over-year. The brand’s limited-edition Purple Cotton Candy flavor variant also helped drive performance throughout the quarter.
The Rockstar Energy brand contributed $66.5 million to quarterly revenue.
The company’s gross profit margin compressed to 48.1%, down from 51.5% recorded in the comparable period last year. Management cited increased promotional spending and channel composition as primary factors, while aluminum cost inflation created additional margin headwinds.
Expansion Markets Continue Advancing
Revenue from international markets climbed 10% to $27.2 million, with Nordic regions and recently entered markets such as the United Kingdom, Ireland, France, and Australia providing the growth momentum.
North American revenue increased 11% to reach $790.7 million.
Chief Executive Officer John Fieldly emphasized the company’s market position across its brand portfolio. “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 combined brand portfolio captured approximately 20.1% dollar share within the U.S. ready-to-drink energy beverage segment during the second quarter.
CELH also accounted for approximately 30% of the $640 million expansion in the zero-sugar U.S. energy drink category throughout the quarter.
PepsiCo, which maintains an 11% ownership stake in CELH, saw its shares edge up 0.5% during premarket trading following the earnings announcement.
CELH shares were changing hands around $24.27 in premarket trading at publication time, substantially below the stock’s 52-week high watermark.
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