Celsius Holdings Inc. (CELH) Earnings & Analysis

Latest quarter

Celsius reported third-quarter revenue of $847.2 million, above the $800.03 million consensus estimate, and adjusted earnings per share of $0.41, above the $0.34 consensus. Revenue rose 16.8% from $725.1 million a year earlier, while diluted earnings per share were $0.39, compared with −$0.27.

The filing shows Alani Nu revenue rose to $410.1 million, which Celsius attributed to consumer demand, product innovation and distribution expansion. CELSIUS brand revenue fell to $356.8 million, with the company citing product rationalization, distributor inventory rebalancing and softness in the club channel. Rockstar contributed $80.3 million; the filing notes that the prior-year period included only part of a quarter following the Pepsi transaction.

Gross margin fell to 46.8% from 51.3%, which Celsius attributed primarily to a higher mix of direct-store-delivery sales and higher aluminum and fuel costs. Operating margin rose to 20.3% from −11.0%. Free cash flow was $127.7 million, compared with $321.5 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO John Fieldly said portfolio retail sales in tracked channels grew approximately 15% year over year in the third quarter. CELSIUS brand sales in those channels fell approximately 7% as the company cycled the prior year’s innovation, while Alani Nu grew approximately 58%. Excluding the Witch’s Brew limited-time offer, Fieldly said core Alani Nu tracked-channel sales grew approximately 50%.

CFO Jarrod Langhans said CELSIUS brand U.S. orders ran below retail scans as the distribution system worked through inventory. He also said shipments across the brands moved into the third quarter from the fourth: “This was in the range of $20 to $25 million.” For Rockstar, he said Canadian order timing contributed to third-quarter revenue, while dollars per distribution point rose approximately 14% from the second quarter.

Asked about pricing and other margin drivers, Langhans said, “Our posture is to follow the category rather than lead it.” He described account-by-account work on package sizes, promotions and pricing, rather than price increases across the board. He said the company is also working on its North Carolina plant, direct sourcing and integration-related cost reductions; commodity prices would affect the timing of its low-50s gross-margin goal.

Fieldly said Celsius established three brand-led business units with dedicated presidents. He also described a multi-year ESPN College Game Day partnership for the CELSIUS brand, with the company measuring brand health, new consumers and repeat purchases.

For the fourth quarter, Langhans said the shipment shift would reduce reported sales, while the prior-year quarter benefited from inventory changes that would not recur. He said some revenue from the first wave of 2027 innovation would arrive in the fourth quarter ahead of January launches.

Guidance

Celsius now expects full-year FY2026 gross margin in the high 40s, depending on commodity fluctuations; its previous outlook called for margin expansion over the remainder of the year. Langhans said higher diesel and aluminum prices had affected the margin outlook since the company’s August update.