Celsius Holdings (CELH, Financial) just took a massive hit, reporting a 31% plunge in Q3 revenue year-over-year, dropping to $265.7 million. The trouble? North American sales tanked, stealing the spotlight from an otherwise impressive 37% growth internationally. Investors weren't pleased—the stock nosedived 11% today, with many pointing to an aggressive inventory optimization move by Celsius's main distributor as the culprit. This overhaul may have stabilized, but it left a mark, cutting down quarterly order volumes and squeezing margins.
Despite the turbulence, Celsius is showing serious resilience on key fronts. Online sales with Amazon soared 21%, hitting $27 million as consumer demand remains steady for this lifestyle energy brand. CEO John Fieldly reassured investors, framing the distributor's adjustment as part of a larger plan to fuel long-term growth. Still, promotions and incentives ate into the gross profit margin, sliding it down from 50.4% to 46.0%. The company's strategic outlook remains intact, with eyes on expanding its consumer base and pushing further into new market segments.
And Celsius isn't just sitting back. In a bold move, they've acquired Big Beverages, a long-time co-packer, to boost manufacturing firepower and accelerate innovation cycles. This acquisition sets Celsius up for faster, more agile production, a critical step given the current market dynamics. Adjusted EBITDA might be down 96% this quarter to just $4.4 million, but Celsius is betting big on this play to cement its position as a heavy hitter in the energy drink world, aiming to lock down North American dominance and ramp up international momentum as the supply chain dust settles.
