Celsius Revenue Rises as Acquired Brands Drive Growth
Gross margin narrowed 340 basis points to 48.1% as commodity costs weighed on profitability.
Celsius Holdings (CELH), the energy-drink maker, reported second-quarter revenue of $817.9 million, up 10.6% from a year earlier and about 4.5% from the first quarter.
The quarter extended Celsius's sequential sales growth, though the expansion depended on acquired brands. Alani Nu generated $364.4 million and Rockstar contributed $66.5 million, while revenue from the CELSIUS brand declined 11.7% amid higher promotions, inventory rebalancing, club-channel softness and SKU optimization.
North America revenue rose 11% to $790.7 million and increased about 5.8% sequentially. International revenue grew 10% from a year earlier to $27.2 million, while falling about 23% from the first quarter.
Profitability weakened as adjusted EBITDA fell 12% to $184.2 million. The adjusted EBITDA margin narrowed 590 basis points to 22.5% and declined roughly 250 basis points sequentially, while net income fell 45% to $55.3 million. Diluted earnings dropped 58% to $0.14 a share, and adjusted diluted earnings declined 23% to $0.36 a share.
An $80.9 million distributor-termination charge reduced operating income to $75.3 million from $143.0 million a year earlier. Sales-and-marketing spending rose to $181.9 million, or 22.2% of revenue, as Celsius invested behind the broader portfolio, while general-and-administrative expense fell to $55.7 million.
Retail performance underscored the portfolio split. CELSIUS-brand tracked-channel sales declined 2% and distribution points fell about 7%, though dollars per distribution point rose approximately 16% from the first quarter. Alani Nu sales grew 55.7% and reached an 8.7% category share, while Rockstar sales declined 13%.
The combined portfolio's U.S. tracked-channel sales increased 31% and reached a 20.1% dollar share, contributing about 30% of the zero-sugar energy category's $640 million quarterly growth. Celsius also accelerated second-quarter share repurchases to $100.4 million, bringing first-half purchases to $124.5 million as its core brand worked through the distribution reset.