Celsius Holdings (NASDAQ:CELH) jumped Wednesday following a strong earnings report. Celsius posted 40 cents in earnings per share for the first quarter, more than doubling the 19-cent consensus estimate of analysts polled by StreetAccount. Revenue also came in well ahead of analyst expectations. Bank of America upgraded shares to buy from neutral as a result.
Analyst Jonathan Keypour said the firm took Celsius Holdings' strong Q1 sales and EBITDA numbers as an encouraging sign that scanned channel trends are providing a reliable read-through to improved consumption. The strong velocity-driven topline gains are also expected to benefit CELH margins through sales leverage just as freight and input cost relief this year also comes into play.
The broad view is that Celsius' broader demographic appeal and positioning alongside new usage occasions should help the company grow the category and take market share, particularly the U.S. distribution partnership with PepsiCo (NASDAQ:PEP ) is leveraged to enter new doors and expand the brand presence on shelves.
“During the first quarter of 2023, Celsius delivered an all-time quarterly record revenue of $260 million in sales and over $34 million in net income, driven by expanded availability and increased consumer awareness.
In addition, we continue to further transition into PepsiCo’s best-in-class distribution system,” CEO John Fieldly said. “In the United States, Celsius is now the established number-three Energy Drink Brand in the category, being the key growth driver over the last 52-week period.”
CELH shares popped $20.46, or 19.1%, to $127.58.
