Celsius Holdings ((CELH)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Celsius Holdings’ latest earnings call paints a complex picture of the company’s financial health. The call showcased notable achievements such as record revenue and significant volume growth, which indicate a positive trajectory for Celsius. However, these were tempered by financial hurdles faced in the fourth quarter, including a revenue decline, increased expenses, and a net loss, leaving investors with mixed sentiments.
Record Revenue Achievement
Celsius reported an all-time high revenue of $1.36 billion for 2024, marking a 3% increase from the previous year. The company also saw a 22% rise in retail sales compared to 2023, showcasing its continued growth and market presence.
Significant Volume Growth
The company achieved a remarkable 22% year-over-year volume growth, significantly outpacing the total energy category, which only grew by 5%. This highlights Celsius’ strong market position and consumer demand for its products.
Expansion of Product Lines and Distribution
Celsius expanded its distribution network by 37% year-over-year, reaching over 241,000 outlets in the United States. This expansion was complemented by the introduction of new products, broadening its market reach.
Strategic Acquisition of Alani Nu
Celsius entered into a definitive agreement to acquire Alani Nu for $1.8 billion. This acquisition aims to bolster Celsius’ platform with a complementary energy brand, enhancing its market position with a lifestyle-oriented product line.
Improved Gross Margin
The company’s gross margin improved by 240 basis points to 50.2% in the latest quarter. This improvement was driven by reduced freight costs and savings on raw materials, reflecting operational efficiencies.
Fourth Quarter Financial Decline
Despite annual gains, Celsius faced a 4% decline in both revenue and adjusted EBITDA in the fourth quarter. This decline was attributed to one-time costs and promotional allowances, indicating challenges in maintaining consistent growth.
Increased SG&A Expenses
The fourth quarter saw a significant 73% increase in SG&A expenses, reaching $185 million. This increase was primarily due to accrued legal expenses and one-time restructuring charges, impacting the company’s profitability.
Net Loss in Fourth Quarter
Celsius reported a net loss of approximately $18.9 million in the fourth quarter, contrasting with a net gain of $50.1 million the previous year, highlighting a challenging quarter for the company.
Decline in Full-Year Income
The company’s full-year income declined by 36%, totaling approximately $145 million. This decline underscores the financial challenges Celsius faced despite its revenue achievements.
Forward-Looking Guidance
Celsius Holdings remains optimistic about its future, with projections of combined sales reaching $2 billion in 2024 following the acquisition of Alani Nu. The company anticipates the acquisition to be both cash and EPS accretive in the first year, with expected cost synergies of $50 million over two years. Celsius’ expansion and strategic acquisitions position it as a key player in the better-for-you functional lifestyle market.
In conclusion, Celsius Holdings’ earnings call reveals a company navigating through both growth and challenges. While record revenues and strategic expansions highlight its potential, financial setbacks in the fourth quarter indicate areas needing attention. Investors will be keenly watching how Celsius leverages its acquisitions and market expansions to drive future success.
