Celsius Q2 Earnings Call Highlights
Key Points
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- Q2 revenue rose 11% to $818 million, supported by Alani Nu growth and the completed Rockstar integration, while adjusted EBITDA declined to $184 million from $210 million a year earlier. Gross margin held near 48%.
- The core Celsius brand’s net sales fell about 12% amid aggressive SKU rationalization, inventory rebalancing and distribution changes. Management expects performance to remain similar in Q3, with gradual improvement beginning in Q4 and a return to growth targeted for 2027.
- Alani Nu remained the key growth engine, with net sales up 21% and tracked-channel retail sales up 56%; Celsius also repurchased about $100 million of stock in Q2 and is targeting greater international contribution over the next five years.
Celsius (NASDAQ:CELH) reported second-quarter revenue of $818 million, up approximately 11% from a year earlier, as growth at Alani Nu and the completed integration of Rockstar helped offset declines in the core Celsius brand.
Chairman and Chief Executive Officer John Fieldly said the company completed the Rockstar integration during the quarter and moved through the most active phase of Celsius SKU rationalization. The company’s combined portfolio held roughly a 20% dollar share of energy-drink sales in tracked U.S. channels, he said.
“We delivered second quarter revenue of $818 million, reflecting the execution of the plan we laid out coming into the year,” Fieldly said. He added that Celsius now has “two $2 billion brands” and sees differentiated roles for Celsius, Alani Nu and Rockstar across consumer segments, retail channels and drinking occasions.
Celsius Brand Sales Decline Amid Portfolio Changes
Chief Financial Officer Jarrod Langhans said net sales for the Celsius brand declined approximately 12% year over year, while retail sales in tracked channels fell 2%. The difference reflected shipment timing tied to inventory rebalancing, greater trade and promotional spending, and softness in the club channel, he said.
The company reduced low-performing SKUs to establish a more consistent national core assortment, but Fieldly acknowledged in the question-and-answer session that Celsius “went too deep” in its rationalization program.
“Looking back, I definitely would’ve not cut as many SKUs within the organization through the commercial plans,” Fieldly said. He said the company has since established greater stability in the portfolio, with Fizz-Free now positioned as a core sub-line alongside VIBE products and core flavors.
Management said the SKU reductions occurred quickly, while retail-space upgrades—including cold placements, end caps and permanent coolers—have taken longer because they require retailer investment and often must align with reset schedules. Celsius also deliberately limited new product innovation while integrating Alani Nu and Rockstar into its distribution system.
Despite the reported sales decline, Langhans said productivity trends remained favorable. Dollars per point of distribution increased about 16% from the first quarter to the second quarter, despite roughly 7% fewer points of distribution. Fizz-Free dollar sales in tracked channels rose more than 20% sequentially during the quarter, according to Fieldly.
The company expects the Celsius brand’s third-quarter performance to resemble the second quarter, with some continued inventory rebalancing and distribution-center changes affecting reported sales. Management expects a gradual improvement beginning in the fourth quarter as the company laps SKU reductions and gains additional retail placement, with a return to growth anticipated in 2027.
Alani Nu Retail Sales Grow 56%
Alani Nu generated approximately $364 million in second-quarter net sales, up about 21% year over year. Retail sales in tracked channels increased approximately 56%, and the brand surpassed $1 billion in retail sales in those channels during the first half of 2026, Fieldly said.
Langhans said the gap between Alani Nu’s retail-sales growth and reported net-sales growth reflected discontinued non-ready-to-drink products, a higher mix of direct-store-distribution sales with associated trade investment and billbacks, product and channel mix, inventory timing, and a non-cash entry related to distribution and captaincy agreements.
Excluding Canada and non-ready-to-drink products, all-in gross revenue growth for Alani Nu was approximately 39%, Langhans said.
The company introduced Purple Cotton Candy during the quarter, which Fieldly said quickly became the brand’s top-selling new flavor in tracked channels. The launch followed earlier limited-time flavors Cherry Bomb and Lime Slush. Management said the brand’s limited-time-offer strategy is intended to drive trial while top-performing flavors are added to its permanent product lineup.
Alani Nu’s back-half calendar includes Witch’s Brew, which Fieldly described as the largest limited-time offer in the brand’s history. However, management also noted that fourth-quarter comparisons will be affected by an inventory build associated with Alani Nu’s Pepsi distribution transition in the prior-year period. The company said it will provide additional detail on the timing of 2027 innovation load-ins after third-quarter results.
Rockstar Integration Completed and Margin Holds Near 48%
Rockstar generated approximately $66 million in second-quarter net sales. The company completed its nine-month integration of the brand in June, moving Rockstar onto Celsius’ platform and finished-goods model.
Management said it is focused on stabilizing Rockstar, strengthening its identity around motorsports, music and lifestyle, and improving velocity following assortment rationalization. Fieldly cited the company’s partnerships with 23XI Racing and Formula DRIFT, as well as updated packaging and a refreshed logo that has begun to roll out.
Second-quarter gross margin was approximately 48%, consistent with the first quarter. Improvements in outbound freight and integration into Celsius’ supply chain offset commodity inflation, particularly for aluminum, Langhans said.
The company expects third-quarter gross margin to remain in the high-40% range at current diesel and aluminum prices. It expects benefits from Alani Nu and Rockstar supply-chain integration to build during the second half as existing higher-cost inventory is worked through. Celsius also expects a second manufacturing line in North Carolina to begin production in the back half of 2026, with the full benefit expected in 2027.
- Second-quarter SG expense was $238 million, essentially flat year over year and equal to 29% of revenue.
- Adjusted SG was 28.6% of revenue.
- Adjusted EBITDA was $184 million, or approximately 22.5% of revenue, compared with $210 million a year earlier.
- First-half adjusted EBITDA totaled $380 million, up 36% year over year and representing approximately 23.7% of revenue.
Capital Returns and International Ambitions
Celsius repurchased approximately $100 million of stock during the second quarter, bringing first-half repurchases to approximately $124 million. Langhans said the company intends to continue using its $300 million repurchase authorization this year.
The company also reduced its interest rate by 25 basis points in July and said it sees an opportunity for an additional 25-basis-point reduction.
Internationally, Fieldly said Celsius expects markets outside the U.S. to account for more than 15% of revenue over the next five years. Sweden delivered its highest four-week sell-through in market history during the quarter, with nearly 3.5 million units purchased by consumers, according to the company. Celsius also said it is evaluating select international launches of Alani Nu in 2027.
About Celsius (NASDAQ:CELH)
Celsius Holdings, Inc is an American beverage company known for its line of fitness and energy drinks formulated to support active lifestyles. The company's flagship product, the Celsius® brand, features beverages enhanced with ingredients such as green tea extract, guarana seed extract and essential vitamins, positioned as a functional alternative to traditional energy drinks. These products are designed to deliver a blend of ingredients that support metabolism and sustained energy without high sugar content or artificial preservatives.
In addition to its core carbonated drink portfolio, Celsius has expanded its offerings to include powder mixes and non-carbonated ready-to-drink variants, catering to consumer preferences around taste, convenience and nutritional needs.
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