Celsius (CELH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 31% year-over-year to $265.7M, mainly due to distributor inventory and supply chain optimization, but YTD revenue rose 5% to $1.02B, with strong retail demand and international expansion in Australia, New Zealand, France, and other markets.

• Gross margin for Q3 fell to 46% from 50.4% last year, but YTD gross margin improved to 50.2% from 48.1%.

• Net income for Q3 dropped 92% year-over-year to $6.4M, with diluted EPS at $0.00; YTD net income was $131M and diluted EPS $0.55.

• The company completed the $75M acquisition of Big Beverages, enhancing innovation, R&D, and supply chain control with a 170,000 sq. ft. facility.

• Retail sales and unit sales grew over 7% year-over-year, with Celsius contributing significantly to energy drink category growth.

Financial highlights

• Q3 2024 revenue: $265.7M (down 31% year-over-year); YTD revenue: $1,023.4M (up 5%).

• Q3 gross profit: $122.2M (down 37%); gross margin: 46%.

• Q3 net income: $6.4M (down 92%); YTD net income: $131M.

• Q3 Adjusted EBITDA: $4.4M (down 96%); YTD Adjusted EBITDA: $192.8M (down 16%).

• Q3 diluted EPS: $0.00; YTD diluted EPS: $0.55.

Outlook and guidance

• No formal forward guidance provided; management expects continued international expansion and will reevaluate guidance in the future.

• Q4 inventory alignment could impact revenue by up to $15M, with sequential improvement in scan data trends anticipated as new flavors and promotions roll out into 2025.

• Big Beverages acquisition expected to provide per-case savings, margin expansion, and EPS accretion potential.