Key Takeaways:
Celsius Holdings reported Q2 revenue of $817.9 million, missing consensus by 6 percent as core brand sales fell 11.7 percent.
"Expect the third quarter to look a lot like the second for brand CELSIUS," CFO Jarrod Langhans said on the earnings call, walking back earlier guidance that had framed Q2 as a "side-step" before a second-half stair-step recovery.
Adjusted earnings of 36 cents a share missed the 42-cent consensus, while net income fell 60 percent to $36.4 million. Gross margin contracted to 48.1 percent from 51.5 percent a year earlier, and adjusted EBITDA dropped 12 percent to $184.2 million, with margin at 22.5 percent versus 28.4 percent.
Alani Nu, acquired in April 2025, delivered $364.4 million in revenue, up 21 percent, with tracked retail sales advancing 55.7 percent. Rockstar added about $66.5 million, though its tracked retail sales fell 13 percent. The combined portfolio holds 20.1 percent of the U.S. ready-to-drink energy category, trailing Monster Beverage and Red Bull.
Management tied the core brand decline to SKU rationalization that cut distribution points before planned shelf and cooler gains were installed, plus reduced innovation, higher trade spending and distributor inventory rebalancing through PepsiCo's direct-store-delivery network. Dollars per point of distribution rose 16 percent from the first quarter despite 7 percent fewer points.
Shares fell 18 percent to $23.77 after the report, leaving the stock down 50.2 percent year to date at a forward P/E of 15 times, below the 17 times beverage industry average. Sell-side targets moved lower across the board: Piper Sandler cut to $36 from $49, Morgan Stanley to $42 from $48, JPMorgan to $52 from $56 and Citigroup to $40 from $50, while Bernstein downgraded to Market Perform with a $26 target.
The miss has drawn an activist challenge. Rockstar Energy founder Russ Savage, who built a 4.7 percent stake of more than 12 million shares, is publicly calling for the removal of CEO John Fieldly and other senior executives, offering to step in as CEO himself. Levi & Korsinsky has opened a securities investigation into whether Celsius adequately disclosed the core brand slowdown, and Texas Attorney General Ken Paxton is probing whether high-caffeine drinks are marketed to minors.
The guidance signals the core brand, still the company's largest, will not return to growth until late 2026, with additional 16-ounce innovation planned for early 2027. Investors will watch whether the board backs Fieldly or yields to Savage's activist push, and whether Alani Nu's momentum can offset the flagship drag into the third-quarter report.
This article is for informational purposes only and does not constitute investment advice.
