Energy-drink maker Celsius Holdings rebounded sharply Wednesday, after reporting second-quarter results late Tuesday that beat expectations.
The company, which has been trying to target health-conscious customers, reported the results after landing a big investment and distribution partnership with PepsiCo.
Celsius earned 12 cents per share vs. 1 cent a year earlier. That was above FactSet estimates for eight cents per share.
Celsius' sales surged 137% to $154 million. The figure topped forecasts for $148.7 million.
Sales in Celsius' North American segment, its biggest, came in at $145.4 million, a 171% increase and above estimates. International sales, overall, were $8.6 million, shy of forecasts.
Gross margins shrank from a year ago to 38.5%, slightly below views.
Celsius Stock
Shares jetted 9.9% to 102.61 in Wednesday's stock market trading. CELH stock fell 7.8% on Tuesday. Shares are nearing a 110.32 buy point in a nine-month cup base. There is also a slightly lower handle entry at 109.84. The stock is extended from early entries at 72.11 and 80.45.
PepsiCo added 0.8% to 175.94. That stock is above a 173.42 early entry in a thee-month flat base. PEP stock hit resistance at the 177.72 official buy point in late July.
Monster Beverage, another energy-drink maker, climbed 1.1% to 89.82 after testing its 200-day line Tuesday. MNST stock had retreated over the prior few days after weaker-than-expected earnings.
Celsius stock jumped 10.9% last week, even with Friday's 9% pullback. At their peak, shares nearly topped their November 2021 record high of 110.22.
Celsius, which already had more than doubled from its May lows, gapped higher on Aug. 1 after it said PepsiCo would make a $550 million investment and become its preferred distribution partner. Pepsi's investment would amount to a 8.5% stake in Celsius, the companies said, based on the deal terms. Pepsi will also nominate a director to Celsius' board.
The move marked Pepsi's latest into the growing energy-drinks business. The beverage and snacks giant bought Rockstar Energy in 2020.
Celsius sells carbonated and noncarbonated beverages that it says don't contain preservatives, aspartame, high-fructose corn syrup and artificial flavoring. During a conference call on the Pepsi deal last week, it said more than half of its sales came from women, and said it was benefiting from a fitness "megatrend."
Celsius said then that it was trying to land its drinks in more convenience-store shelves, colleges and other locations. And it is hoping to streamline the way its drinks get to customers.
The company said shifting to a national distribution partner, from dozens of independent distributors, "allows our team to consolidate sales, marketing and distribution efforts."
