Celsius reported over $28 million in revenue during the first quarter, a 95% increase over the same period last year and a new quarterly record for the brand.
The Boca Raton, Flor.-based fitness energy drink and supplement maker enjoyed growth in both its domestic and international revenue streams, with the former up 70% ($19.4 million) and the latter increasing 186% ($8.8 million). Gross profit rose from $5.7 million in Q1 2019 to $11.7 million this quarter, a 128% jump.
Sales and marketing expenses during the quarter increased 108% to $7.5 million, primarily due to the impact of the consolidation of the operations of the company’s Nordic partner Func Food Group. As of March 31, the company had cash of $19.1 million and working capital of $27.4 million.
“Our record first quarter results reflect our continued momentum and the tremendous traction we are gaining with the distribution and placement of our products around the world,” said Celsius president and CEO John Fieldly in a press release. “We continued to leverage strategic partnerships, online experiences and retail relationships to further increase volume in the first quarter and deliver our fifth consecutive quarter of sequential growth with double-digit increases across all geographic regions while expanding gross margins and delivering positive net income.”
In March, Celsius launched two new SKUs, Orange and Kiwi Guava at more than 1,500 Walmart stores. At Target, the company gained authorization for Grapefruit Melon Green Tea at more than 1,300 locations nationwide. Speaking with BevNET, Fieldly said the company’s work building a base in grocery and mass retail has allowed it to weather slow downs in fitness retailers and convenience stores.
“From the beginning, it’s all about building the community around the brand,” he said. “We truly have built a solid, great community around Celsius, and you see that with the sales continuing to shift where the new shopping patterns are going. We aren’t just an impulse purchase.”
Fieldly said Celsius has shifted many of its experiential off-line activations to digital and online platforms, resulting in a 167% increase in average daily online sales volume compared to the same period last year. The brand has seen encouraging early signs in Q2, with North American sales volume so far growing 38% over the previous year.
Though the brand recently launched online activations with Instacart and Food Lion, it remains primarily focused on brick-and-mortar retail sales. Fieldly said the brand’s goal remains building a national DSD network, with around 100 houses signed up thus far. Seeing Pepsi sign a distribution pact with Bang Energy confirms that the category is growing, he said, while also opening potential opportunities for Celsius to land new distributors.
“We have out-of-stocks across the country in Walmarts, which are 50% going through warehouse [distributors],” he said. “The product can’t stay in stock going through their replenishment systems, so we want to get these flipped over to DSD as quickly as possible. When we [have in the past], we see velocities go up exponentially.”