Celsius Holdings Q4 Earnings on Deck: What to Expect From CELH?

Core Viewpoint - Celsius Holdings, Inc. is expected to report a decline in both revenue and earnings for the fourth quarter of 2024, with revenues estimated at $328.97 million, reflecting a 5.3% decrease year-over-year [1] Group 1: Financial Performance - The consensus estimate for earnings has decreased to 11 cents per share, indicating a 35.3% drop from the previous year's quarter [2] - The company has experienced a trailing four-quarter negative earnings surprise of 9.3% on average [2] Group 2: Challenges Faced - Celsius Holdings faced a significant 31% revenue decline in the third quarter of 2024 due to inventory optimization adjustments from its primary distributor, PepsiCo [3] - Broader macroeconomic pressures and reduced discretionary spending have negatively impacted demand for CELH's products [3] - The company's gross margin fell by 440 basis points to 46% in the third quarter, primarily due to a PepsiCo incentive program aimed at increasing market share, which has adversely affected profitability [4] - Sales and marketing expenses remain high at 37.6% of revenues, raising concerns about operating costs [4] Group 3: Strengths and Opportunities - Celsius Holdings is focusing on innovation and marketing, regularly launching new flavors and product variations to meet changing consumer preferences [5] - The company has established a strong retail presence, securing prime shelf space in major retail chains, convenience stores, and online platforms, which enhances its market reach [5] - A diverse distribution strategy, including e-commerce and foodservice channels, further supports revenue generation [5] Group 4: Earnings Outlook - The current model does not predict an earnings beat for Celsius Holdings, as it holds a Zacks Rank of 4 (Sell) and an Earnings ESP of -3.74% [6]