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01/11 03:29
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Positive elements include record revenue, international growth, and strong cash flow. However, revenue decline, decreased EBITDA, and unclear responses on promotional allowances and gross margin sustainability raise concerns. The acquisition of Alani Nu could be a positive catalyst, but operational efficiency challenges and lack of share repurchase plans limit potential upside. Overall, the sentiment is balanced with both positive and negative aspects, leading to a neutral stock price prediction.
Revenue $329,300,000, a 7% decline year-over-year due to slowed velocity, timing and structure of U.S. distributor incentive program, and increased retail promotional programs.
Adjusted EBITDA $69,700,000 with a margin of 21.2%, down from $88,000,000 and 24.7% margin in Q1 2024, driven by organizational investments.
Gross Profit $172,400,000, with a gross margin of 52.3%, expanded by 110 basis points due to sourcing efficiencies for raw and packaging materials.
Net Income $34,400,000 or $0.15 per diluted share, down from $0.27 in the prior year period.
Non-GAAP Adjusted Diluted EPS $0.18, compared to $0.27 in the prior year period.
Cash Position $977,000,000 in cash with no outstanding debt as of 03/31/2025, prior to the Elani Nu acquisition.
International Revenue $22,800,000, a 41% increase year-over-year, demonstrating strong organic growth in legacy and new markets.
Dollar Share in U.S. Tracked Channels 10.9% for the thirteen weeks ending 03/30/2025, steady despite increased competition.
Combined Dollar Share 16.2% in the quarter ending March 30, an 81 basis point increase year-over-year.
Foodservice Sales Approximately 13.4% of North America sales through PepsiCo.
New Product Launches: Celsius launched new core vibe and essential flavors, and expanded multipack offerings, which now represent approximately 28.5% of retail sales mix.
Celsius Hydration: Launched a new line of zero sugar, zero caffeine electrolyte powder sticks, entering the $1.4 billion hydration powder category.
International Revenue Growth: International revenue grew 41% to $22.8 million, demonstrating strong organic growth in legacy and new markets.
Retail Expansion: Expanded into more than 1,800 Home Depot locations and began rolling out Celsius in 18,000 Subway locations nationwide.
Market Share: Celsius held a 10.9% dollar share in tracked channels for the 13 weeks ending 03/30/2025, with a combined 16.2% dollar share for Celsius and Elani Nu.
Operational Efficiency: Appointed Eric Hansen as President and COO to drive operational excellence and scale.
Manufacturing Flexibility: Big Beverages facility now fully integrated, providing greater manufacturing flexibility and faster innovation cycles.
Acquisition of Elani Nu: Successfully closed the acquisition of Elani Nu on April 1, adding a second billion-dollar brand to Celsius Holdings.
Marketing Strategy: Increased marketing investments behind the core Celsius brand and a new campaign launching this summer.
Revenue Decline: First quarter revenue totaled $329.3 million, a 7% decline compared to the prior year, attributed to slowed velocity, timing and structure of distributor incentive programs, and increased retail promotional programs.
Increased Competition: Celsius faced increased competition in the energy drink market, impacting sales and velocity.
Regulatory and Economic Factors: The company noted uncertainties related to government actions that could impact supply chain operations and pricing strategies.
Supply Chain Challenges: Concerns were raised about potential future impacts from tariffs and inflation on sourcing materials, particularly aluminum.
Promotional Allowances: The timing and breadth of retail promotional allowances were noted as factors affecting sales performance, with expectations of pressure in the first half of the year.
Destocking Issues: There were no significant destocking issues reported, but some timing and sequencing challenges were noted in the distribution network.
Operational Efficiency: While the company is focused on operational excellence, the integration of the Elani Nu acquisition may present challenges in achieving desired efficiencies.
Acquisition of Elani Nu: Successfully closed the acquisition of Elani Nu on April 1, adding a second billion dollar brand to Celsius Holdings' functional beverage platform.
Operational Excellence: Appointment of Eric Hansen as President and COO to drive operational excellence and efficiencies.
Innovation: Launch of new flavors and products, including Celsius Hydration and multipack offerings, to enhance market presence.
Retail Expansion: Expansion into over 1,800 Home Depot locations and 18,000 Subway locations to increase brand visibility.
Marketing Initiatives: Increased marketing investments to support core Celsius brand and new product launches.
Revenue Expectations: Expect to continue gaining incremental retail space and improving consumer awareness in Q2 and Q3.
Adjusted EBITDA: Adjusted EBITDA for Q1 2025 was $69.7 million with a margin of 21.2%.
Gross Margin: Gross margin expanded to 52.3%, with expectations to maintain strong gross profit numbers.
International Growth: International revenue grew 41% in Q1, with plans for further expansion in new markets.
Future Outlook: Confident in the ability to drive sustained growth and value creation in 2025 and beyond.
Share Repurchase Program: None
The earnings call reveals mixed sentiments. While there are positive developments like debt reduction, cost efficiency, and international growth, concerns about margin pressure, uncertain Q4 transition impacts, and lack of clear guidance on pricing and inventory management temper optimism. The Q&A section highlights potential risks and uncertainties, with management avoiding direct responses on key issues. The strategic plan suggests growth potential, but margin pressures and unclear guidance may offset short-term stock price gains. Overall, the sentiment is balanced, leading to a neutral stock price prediction.
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