Celsius Holdings, Inc. CELH used its second-quarter 2026 earnings call to temper near-term expectations for brand CELSIUS. Chairman and chief executive officer John Fieldly said the brand’s third-quarter performance should look much like Q2 before returning to growth exiting the year.
Adjusted EPS of $0.36 missed the Zacks Consensus Estimate of $0.42, while revenues of $817.9 million missed the $883.3 million consensus. Revenues still increased 10.6% year over year.
CELH Sees Q3 Core Brand Pressure Persist
Chief financial officer Jarrod Langhans said brand CELSIUS net sales fell approximately 12% year over year versus a 2% decline in tracked retail sales. He cited shipment timing, higher trade and promotional investment, and club-channel softness.
Langhans said depletions versus orders accounted for roughly half the gap between scanner and reported results at quarter-end as distributor inventory rebalanced following SKU removals.
Fieldly said third-quarter weekly run rates should be broadly similar to Q2, with slight increases, before CELSIUS exits 2026 back in growth.
Celsius Says SKU Cuts Went Too Far
During Q&A, a Goldman Sachs analyst asked whether the SKU rationalization had been the right decision. Fieldly acknowledged that Celsius cut too many CELSIUS SKUs and said a lighter reduction would have been preferable.
Fieldly said assortment cuts occurred immediately, while targeted cold-space and permanent cooler gains took longer. Celsius also deliberately limited innovation while integrating Alani Nu and Rockstar.
Fieldly identified the 16-ounce line as an area needing work and said a meaningful new offering is planned for early 2027. He said future optimization will emphasize replacing tail SKUs with permanent innovation.
CELH Leans on Alani as Rockstar Stabilizes
Langhans said Alani Nu generated approximately $364 million in second-quarter net sales, up approximately 21% year over year, while tracked retail sales rose 56%. Higher DSD mix, trade investment and billbacks reduced reported net revenue growth.
Fieldly said Purple Cotton Candy became Alani's top-selling new flavor in tracked channels. He emphasized building a more stable permanent core by moving successful limited-time flavors into everyday placements.
Fieldly added the Rockstar integration was completed in June on the planned nine-month timeline. His near-term focus is stability, core identity and improved velocity ahead of 2027.
Celsius Sees Margin Gains Offset by Commodities
Langhans said second-quarter gross margin was approximately 48%, consistent with the first quarter, as outbound freight and integration benefits offset commodity inflation, primarily aluminum.
He expects third-quarter gross margin to remain in the high 40s at current diesel and aluminum levels. Integration savings should build through the back half, while price-pack architecture begins contributing.
Langhans said adjusted EBITDA was $184 million, or approximately 22.5% of revenues, compared with $210 million a year earlier, reflecting commodity pressure and brand investment.
CELH Q&A Points to a Gradual Q4 Recovery
A Stephens analyst pressed for the magnitude of a fourth-quarter CELSIUS recovery. Fieldly said improvement should build gradually as Celsius laps rationalization effects and gains better retail placement, rather than producing an immediate snapback.
Langhans said reported CELSIUS results will face a softer year-over-year comparison, while Alani must cycle a prior-year inventory build. Timing of 2027 innovation load-ins across Q4 and Q1 remains under planning with the DSD partner.
A Morgan Stanley analyst questioned delayed shelf-space gains. Langhans said timing ran behind initial expectations because cold fixtures required more labor and retailer investment, though July gains arrived and additional cold-space changes are planned for September and Q4.
Celsius Keeps Back-Half Focus on Execution
Langhans framed the third quarter around service quality, network efficiency and moving more volume closer to retailers. He also said Celsius is adding merchandisers and sales representatives to improve in-stock execution.
Fieldly's broader posture remained centered on 2027, with renewed CELSIUS innovation, continued Alani expansion and a stabilized Rockstar platform shaping priorities coming out of the call.
CELH Zacks Signals Remain Cautious
CELH currently carries a Zacks Rank #4 (Sell), with a Value Score of D, Growth Score of C, Momentum Score of F and VGM Score of D. Under the Zacks methodology, the rank reflects an unfavorable earnings-estimate revision trend, while the Style Scores sit below the preferred A or B range.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With A ranking above B and lower grades less favorable, the Growth Score of C stands above the Value Score of D and Momentum Score of F, while the VGM Score of D keeps the combined style signal cautious for the one-to-three-month horizon. The Zacks Rank can change as analyst estimates are revised following the just-reported second-quarter results.
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Celsius Holdings Inc. (CELH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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