Celsius Holdings Stock (NASDAQ: CELH) Holds Steady Despite Earnings Miss

Celsius Holdings stock price (NASDAQ: CELH) ended the extended hours session with a gain of 0.73%, despite missing on both top and bottom lines in it's most recent report.

In Q1 2025, Celsius Holdings achieved a revenue of $329.3 million, marking a 7% decrease compared to the same quarter in the previous year, and below the $342.31 million consensus on the street. Earnings per share also came in light, with the $0.18 for the period shy of the $0.19 expected.

Despite this, the company reported an improvement in its gross margin, which expanded by 110 basis points to 52.3%. Adjusted EBITDA for the quarter was recorded at $69.7 million. CEO John Fieldy was bullish on the print, as the firm “saw business fundamentals strengthen through the quarter”. Comments surrounding “positive momentum heading into Q2” and strong international growth have also helped boost sentiment.

Having seen Celsius Holdings' stock significantly outperform markets this year, with a 30.59% YTD coming as broader markets declined, there is a ways to go in order to recapture the levels hit just last year. The stock continues to trade negatively on a 12 month basis (-53.84%), and are more than 60% below the highs hit during the same month in 2024.

The energy drinks sector continues to demonstrate resilience, propelled by health and wellness trends and innovation. Despite these favorable market conditions, Celsius faced a sluggish start in the quarter. Contributing factors included heightened competition and the anniversary of last year’s product launches. A decrease in sales was further influenced by promotional allowances and the timing of non-direct store delivery (DSD) sales. Nevertheless, the company maintains stable inventory levels.

Celsius is implementing consumer-focused programs and leveraging its brand identity to enhance sales velocity, particularly in the sugar-free category. The company is also assessing opportunities for price adjustments while carefully observing consumer purchasing behaviors. New product innovations and strategic moves, such as cooler placements at checkouts, are crucial for broadening their presence on retail shelves.

Amidst these efforts, the company signals optimism regarding the performance of Alani Nu, an up-and-coming brand, citing its robust retail momentum and strong consumer loyalty. Analysts continue to see potential upside from here, with the consensus price target of $42.16 not dissimilar to the recent $44 target from JP Morgan. Markets appear for now to be accepting of the mild miss on the quarter, with the longer term story and forward looking guidance proving key.