Why Celsius Holdings Shares Are Falling Today

Celsius Holdings, Inc. CELH shares are trading lower after the company reported worse-than-expected first-quarter sales results.

The company reported earnings per share of 27 cents, beating the analyst consensus of 18 cents. 

Quarterly revenues of $355.708 million, missing the street view of $389.861 million. Sales jumped 37% year over year, driven primarily by the North American business and the company’s success in sustaining consumer demand growth.

Gross profit increased 60% year over year to $182.2 million, while gross margin jumped 740 basis points to 51.2%. Adjusted EBITDA jumped 81% year over year to $88 million.

Club channel sales in the quarter increased 36% to $63 million, while Celsius sales on Amazon.Com, Inc. AMZN Amazon increased 30% to approximately $28 million, and Celsius remained the #1 energy drink brand by dollar share.

Approximately 12% of Celsius’ total sales to PepsiCo, Inc. PEP in the first quarter of 2024 was to the food service channel.  

Ongoing inventory fluctuations may be expected in subsequent quarters because its largest distributor constituted 62% of total North American sales during the first quarter of 2024.

International sales of $16.2 million increased 43% from $11.3 million for the prior-year period, driven by ongoing velocity improvements and product launches.

International Expansion

Sales in Canada began in the first quarter of 2024 and continue to exceed pre-launch expectations. 

Celsius’ share in the energy category in MULOC in Canada was 5.5% as of Feb. 29, 2024, according to Canadian NiQ data.

Celsius, in the first quarter, announced plans to expand its sales and distribution into Australia, France, Ireland, New Zealand, and the U.K. in 2024.

Price Action: CELH shares are trading lower by 2.9% to $76.06 at last check Tuesday.

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