Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Celsius Holdings Inc (CELH, Financial) successfully closed the acquisition of Alani Nu, adding a second billion-dollar brand to its portfolio.
- International revenue grew 41% to $22.8 million, demonstrating strong organic growth in both legacy and new markets.
- Gross margin expanded by 110 basis points to 52.3%, supported by sourcing efficiencies for raw and packaging materials.
- Celsius Holdings Inc (CELH) captured a 16.2% dollar share in the energy drink category, an 81-basis point increase year-over-year.
- The company launched new products, including CELSIUS HYDRATION, expanding into the fast-growing $1.4 billion hydration powder category.
Negative Points
- First quarter revenue declined by 7% compared to the prior year, totaling $329.3 million.
- The company faced slowed velocity in the first quarter, impacting overall sales performance.
- Increased competition and strong pricing actions by other category players posed challenges.
- Selling, general, and administrative expenses increased to $120.3 million, reflecting transaction-related expenses and continued investment.
- Non-GAAP adjusted EBITDA margin decreased to 21.2% from 24.7% in the prior year, driven by organizational investments.
Q & A Highlights
Q: Can you explain why the energy drinks category is accelerating while other CPG categories are declining?
A: John Fieldly, CEO, noted that the energy category has been resilient in both dollar and volume growth. Health and wellness trends and significant innovation in the category have driven consumer excitement and growth.
Q: What steps are being taken to improve sales velocity?
A: John Fieldly, CEO, mentioned a balanced approach this year, learning from past experiences. The company is focusing on consumer-centric programs and leveraging the brand's DNA to attract more consumers, particularly in the sugar-free segment.
Q: Can you provide more details on the first-quarter sales performance and the factors affecting it?
A: John Fieldly, CEO, explained that the slow start was due to increased competition and cycling of previous year's launches. CFO Jarrod Langhans added that promotional allowances and timing of non-DSD sales contributed to the decline, but inventory levels remain stable.
Q: How is the pricing strategy being managed in the current market environment?
A: John Fieldly, CEO, stated that while there are opportunities for price increases, the company is cautious about consumer purchasing habits. They took pricing actions in Q4 last year and are monitoring consumer behavior closely to adjust promotional activities accordingly.
Q: What are the expectations for shelf space expansion and how will it be activated?
A: John Fieldly, CEO, highlighted new product innovations and secondary placements like checkout coolers as key strategies. The company is also excited about Alani Nu's potential, especially with its strong retail sales momentum and loyal consumer base.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
