Celsius: Domestic Growth Fuel Revenue Gains in Q3

Fitness energy drink brand Celsius saw domestic growth boost overall revenue 23% during the third quarter, according to financial results released by the company last week.

Revenue from the brand’s U.S. business rose by nearly half to $16.8 million, helping to offset declines in Europe (11%) and Asia (86%). Overall international revenue fell 30% to $3.7 million during the quarter. Year-to-date, international revenue is down 15% to $8.4 million, which the company attributed mainly to its shift to a licensing business model in China, a move aimed at mitigating risk and marketing expenditures.

Gross profit rose 26% from the same period last year, from $6.9 million to $8.6 million.

Speaking to investors and media, Celsius president and CEO John Fieldly offered updates on Celsius’s U.S. DSD strategy, which now includes partnerships with 70 regional suppliers across the country. He said the company is partnering with distributor Big Geyser to service all 7-Eleven stores in the New York City metro area, and is currently transitioning Target and CVS stores to direct distribution as well. He also touted a national authorization with Compass Group North America which brought Celsius products into foodservice outlets including hospitals, airports, universities, casinos and restaurants.

Celsius has grown its total North America retail locations by 57% this year, bringing it to over 60,000 points of distribution.

C-stores are also a growing part of the company’s growth plans, according to Fieldly. He cited data from market research group SPINS through September 8 showing Celsius growing at 41.1% year-over-year in the convenience channel.

“This demonstrates Celsius warrants additional shelf space and we are leveraging this data with buyers,” he said, pointing to recent expansion into 3,300 convenience stores including Circle K, Myers Convenience, Flying J and Pilot.

Fieldly is also expecting Celsius’s acquisiton of Finland-based distributor Func in October for approximately $24.2 million — comprised of $14.8 million in cash and $9.4 million in outstanding restructured debt — to help the company move closer to its goal of a $100 million run rate. The deal also included the rights to FAST, a portfolio of protein-based snacks and beverages.

“Through this acquisition, we are gaining critical access to expand in European markets with a well-established operationally infrastructure and unique marketing platform,” he said. “In addition, it provides us with the ability to bring an entirely new yet complementary product offering to consumers with the FAST Protein Snack portfolio. This transaction puts Celsius in two of the fastest-growing categories in food and beverage, the energy category and the growing Protein Snack category with two complementary brands.”