Celsius Holdings' stocks experienced a decline after Q3.

Celsius Holdings, Inc. (NASDAQ:CELH) shares lost 11.5% after announcing its third-quarter results. The company reported results that exceeded analyst expectations but showed concerning trends in the core CELSIUS brand.

In the third quarter, Celsius reported adjusted earnings per share of $0.42, surpassing the analysts' expectation of $0.28. Revenue was recorded at $725.1 million, exceeding the forecast of $715.7 million, and representing a 173% increase compared to the same quarter last year, up from $265.7 million. However, it was noted that much of this growth was driven by recent acquisitions.

The company's total portfolio increased retail sales by 31% year-over-year; however, the performance of individual brands varied significantly. The core CELSIUS brand saw only a 13% year-over-year increase in retail sales, while the Alani Nu brand, acquired in April, experienced a 114% increase. Conversely, the Rockstar Energy brand, acquired in August, saw a 9% decline. The market share of the CELSIUS brand in the U.S. Fast-Moving Consumer Energy category decreased by 0.5 points year-over-year, dropping to 11.2%.

John Fieldly, Chairman and CEO, stated, "The third quarter marks an important step in Celsius Holdings' transformation during a year full of growth catalysts." He added, "We strengthened our long-term partnership with PepsiCo and consolidated the CELSIUS, Alani Nu, and Rockstar Energy brands under a single energy portfolio."

The company's gross margin increased from 46.0% in the same quarter last year to 51.3%, achieved through lower promotional spending, a favorable product mix, and economies of scale. International revenue grew by 24%, reaching $23.1 million.

Celsius recorded a $246.7 million distributor termination cost related to the transfer of a significant portion of Alani Nu's distribution to the PepsiCo system; however, PepsiCo committed to financing these costs, providing a net cash position.

While focusing on operational excellence and long-term growth, the company appointed Rishi Daing as Chief Marketing Officer.