Financial Data and Key Metrics - Q3 2024 revenue was 265.7million,adecreasefromthepreviousyearprimarilyduetodistributorinventoryoptimization[10]−Year−to−daterevenuethroughSeptember30,2024,was1.02 billion, a 5% increase from the prior year [11] - Gross profit in Q3 decreased 37% to 122million,withgrossprofitmarginsat464.4 million, with year-to-date adjusted EBITDA margin at 18.8% [35] - Net income in Q3 decreased 92% to 6.4million,withyear−to−datenetincomeat164 million [35] Business Line Data and Key Metrics - Retail sales increased 7.1% year-over-year, with unit sales up 7.3% [9] - Sales to Amazon increased 21% year-over-year to 27million[18]−SalestoCostcoincreased1560.5 million [19] - Approximately 12.3% of total North America sales were through the food service channel, with lodging and restaurant points of distribution up 46% and 27% respectively [17] Market Data and Key Metrics - Domestic market share in MULO Plus with Convenience rose to 11.6%, an increase of 10 basis points from the previous year [16] - International revenue grew 37% to 18.6millioninQ32024[30]−ThecompanylaunchedinAustraliaandNewZealandinOctober[20]CompanyStrategyandIndustryCompetition−Thecompanyfocusesonthreekeygrowthdrivers:attractingnewconsumers,expandingproductavailability,andincreasingconsumptionfrequency[12]−RecentinnovationsincludenewflavorslikeGrapeSlushandWatermelonIce,andtheacquisitionofBigBeveragetoenhancesupplychaincontrolandinnovationcapabilities[14][21]−ThecompanyisinvestinginAI−assistedsellingtoolsandnewtechnologiestoimproveoperationalefficiency[23]−Thecompanyisexpandingglobally,withnewmarketsintheUK,Ireland,Australia,NewZealand,andFrance[78][80]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−Thecompanyexpectstoseealignmentofsell−inandsell−throughbeforeQ4ends,withpotentialpressurerangingfromaslightbenefitto15 million [49][51] - Management is optimistic about the sugar-free movement, with over 50% of the energy drink category now sugar-free [41] - The company is focused on increasing availability and expanding placements, particularly in convenience stores [16][60] Other Important Information - The company acquired Big Beverage, a long-term co-packer, to gain greater control over the supply chain and innovation capabilities [21] - A new center of excellence was established in Ireland to drive global innovation, procurement, and supply chain [22] - Two new board members, Hans Melotte and Israel Kontorovsky, were added, bringing extensive global consumer goods experience [24] Q&A Session Summary Question: Cadence for Q4 2024 and 2025 - The company has promotional activities planned for Q4 and is focusing on growth drivers like increasing new consumers and expanding availability [37][38] Question: Consumer Trends and Category Growth - The company needs improved macroeconomic trends and increased traffic to re-accelerate category growth [40][42] Question: Incentive Structure with Pepsi - The incentive program with Pepsi is expected to drive category acceleration through priority periods and further alignment [44][45] Question: Inventory Optimization - The company expects alignment of sell-in and sell-through before Q4 ends, with potential pressure ranging from a slight benefit to $15 million [48][51] Question: Market Share and Consumer Behavior - The company is focused on increasing consumption occasions and bringing back consumers as confidence returns [55][56] Question: International Expansion - The company is expanding into new markets like the UK, Ireland, Australia, New Zealand, and France, with a focus on higher energy drink volume markets [78][80] Question: Shelf Space and Competitive Positioning - The company expects to gain additional shelf space and better placements in 2025, with positive feedback from retailers [84][85] Question: Balance Sheet and Vertical Integration - The company acquired Big Beverage to enhance innovation capabilities and supply chain control, with no immediate plans for further vertical integration [87][90] Question: Execution Playbook and Pricing - The company is evolving its playbook to focus on sugar-free products and increasing availability, with a conservative approach to pricing [95][96][100]
Celsius(CELH)2024-11-06 15:40