In This Article:
Energy drink company Celsius (NASDAQ:CELH) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 7.4% year on year to $329.3 million. Its non-GAAP profit of $0.15 per share was 24.1% below analysts’ consensus estimates.
Is now the time to buy CELH? Find out in our full research report (it’s free).
Celsius (CELH) Q1 CY2025 Highlights:
-
Revenue: $329.3 million vs analyst estimates of $342.3 million (7.4% year-on-year decline, 3.8% miss)
-
Adjusted EPS: $0.15 vs analyst expectations of $0.19 (24.1% miss)
-
Adjusted EBITDA: $69.69 million vs analyst estimates of $72.12 million (21.2% margin, 3.4% miss)
-
Operating Margin: 15.8%, down from 23.4% in the same quarter last year
-
Free Cash Flow Margin: 29.3%, down from 36.6% in the same quarter last year
-
Market Capitalization: $9.15 billion
StockStory’s Take
Celsius’s first quarter results were largely influenced by a combination of slower retail velocity, changes in promotional strategies, and challenging comparisons to the prior year’s product launches. Management cited that cycling last year’s major ESSENTIALS launch and a more balanced approach to promotions contributed to the sales decline. CEO John Fieldly noted, “We got off to a slow start and we have more of a balanced approach this year,” highlighting the company’s recalibration in response to shifting consumer trends and increased competition.
Looking ahead, management’s forward guidance centers on operational integration of the recently acquired Alani Nu brand and a focus on innovation to regain momentum. CFO Jarrod Langhans pointed out that gross margin improvements from sourcing efficiencies are expected to persist in the near-term, though he acknowledged uncertainties related to tariffs and inflation later in the year. The company plans to leverage its stronger retail presence and new marketing initiatives, anticipating that easier year-over-year comparisons and expanded shelf space will help drive recovery in subsequent quarters.
Key Insights from Management’s Remarks
Celsius’s management identified several key themes impacting the first quarter’s performance and outlined strategic updates for future growth.
-
Distribution and innovation mix: The company attributed the revenue decline to slower retail velocity, changes in timing and structure of U.S. distributor incentives, and more balanced promotional programs versus last year’s heavy first-quarter activity.
-
Acquisition of Alani Nu: The completed acquisition of Alani Nu adds a second $1 billion brand to Celsius’s portfolio. Management emphasized minimal cannibalization between the brands and sees opportunities to cross-leverage distribution and consumer segments, especially targeting female consumers.
-
International market expansion: International revenues grew 41%, with gains in markets like the UK, Ireland, France, Australia, and New Zealand. Management intends to maintain a measured approach to further global expansion.
-
Gross margin resilience: Despite revenue pressure, gross margin improved by 110 basis points to 52.3%, supported by sourcing and manufacturing efficiencies. Management expects near-term margin stability but flagged uncertainty from potential inflation or tariffs later in the year.
-
Shelf space and product launches: Shelf resets and retail expansion, particularly for new flavors and multipack offerings, were highlighted as drivers for future quarters. The launch of CELSIUS HYDRATION and increased cold placement at checkout are expected to further support in-store presence.