Stock Story -
Energy drink company Celsius (NASDAQ:CELH) reported results ahead of analysts' expectations in Q2 CY2024, with revenue up 23.4% year on year to $402 million. It made a GAAP profit of $0.28 per share, down from its profit of $0.52 per share in the same quarter last year.
Is now the time to buy Celsius? Find out by reading the original article on StockStory, it's free.
Celsius (CELH) Q2 CY2024 Highlights:
- Revenue: $402 million vs analyst estimates of $392.7 million (2.4% beat)
- EPS: $0.28 vs analyst estimates of $0.23 (19.7% beat)
- Gross Margin (GAAP): 52%, up from 48.8% in the same quarter last year
- Adjusted EBITDA Margin: 25%, up from 24% in the same quarter last year
- Market Capitalization: $9.64 billion
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ:CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Beverages and AlcoholThese companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the explosion of alcoholic craft beer drinks or the steady decline of non-alcoholic sugary sodas. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.
Sales GrowthCelsius is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 99.5% over the last three years was incredible for a consumer staples business.
This quarter, Celsius reported remarkable year-on-year revenue growth of 23.4%, and its $402 million in revenue topped Wall Street estimates by 2.4%. Looking ahead, Wall Street expects sales to grow 21.4% over the next 12 months, a deceleration from this quarter.
Operating MarginCelsius has done a decent job managing its expenses over the last two years. The company has produced an average operating margin of 10.8%, higher than the broader consumer staples sector.
Analyzing the trend in its profitability, Celsius's annual operating margin rose by 29.8 percentage points over the last two years, as its sales growth gave it immense operating leverage.
This quarter, Celsius generated an operating profit margin of 23.4%, up 3.6 percentage points year on year. This increase was encouraging, and since the company's operating margin rose more than its gross margin, we can infer it was recently more efficient with expenses such as sales, marketing, and administrative overhead.
Key Takeaways from Celsius's Q2 Results We enjoyed seeing Celsius exceed analysts' gross margin expectations this quarter. We were also excited its revenue and EPS outperformed Wall Street's estimates. This was a fantastic quarter that should have shareholders cheering. The stock traded up 9.6% to $45.30 immediately following the results.
