Celsius Holdings (CELH) Q3 2026 earnings review
Alani Nu sales jump, but the flagship CELSIUS brand shrinks
Celsius Holdings, the maker of CELSIUS, Alani Nu and Rockstar energy drinks, leaned on Alani Nu while its original brand contracted. Total revenue rose 17% from a year ago to $847 million, or 8% by our math excluding the acquired Rockstar business, as a hit seasonal flavor pushed Alani Nu past the flagship CELSIUS drink in U.S. market share. Chief executive John Fieldly said the company progressed on improving the CELSIUS brand, but its U.S. retail sales fell 7% and gross margin dropped to 46.8% on aluminum costs and distributor rebates.
| Sales from brands owned a year ago | +7.6% by our math; total revenue +17% to $847M |
|---|---|
| U.S. retail sales: Alani Nu vs CELSIUS | +58% / -7% Alani Nu passed CELSIUS in U.S. market share (9.8% vs 9.1%) |
| Gross margin | 46.8% down 4.5 percentage points from a year ago |
| Margin expansion outlook | Pushed out framed as long-term rather than the rest of 2026 |
⚖️ Verdict: 🔴 Bearish
The story got worse because the flagship CELSIUS drink shrank faster at retail and gross margin broke below the high-40s plan, forcing the company to push its margin recovery timeline out to the long term. On the other side, Alani Nu ended a three-quarter sequential plateau and overseas sales jumped 78%.
The question now is whether Alani Nu can hold its higher sales base after its fall flavor ends and whether the new brand president can stop the CELSIUS retail slide. Optimists see durable distribution gains and upcoming 2027 product launches, while skeptics see Alani Nu cannibalizing the flagship drink and giving up half its retail growth in PepsiCo rebates. Fourth-quarter retail scanner data and gross margin will tell.
🐂 Bull Case
Alani Nu Broke Out of Its Three-Quarter Sales Plateau
Celsius Holdings relies on its three-brand portfolio — CELSIUS, Alani Nu and Rockstar Energy — to keep growing while its original drink slows. Chief executive John Fieldly said the record quarter came from "the strength of our scaled, multi-brand Modern Energy platform and continued execution of our total energy portfolio strategy". Critics worried that Alani Nu, the fitness drink bought in April 2025, had stalled after three flat quarters near $367 million.
Alani Nu broke that streak in the third quarter, rising 23.5% from a year ago and 12.5% from the second quarter to $410.1 million. The company credited wider distribution in the PepsiCo direct-store-delivery (DSD) network, where PepsiCo trucks stock retailer shelves directly, and its fall Witch's Brew flavor, which it called "the brand’s most successful limited-time-offering (LTO)".
That surge lifted Alani Nu to 9.8% of U.S. ready-to-drink energy retail dollars, up from 8.7% last quarter, making it bigger than the flagship CELSIUS brand at 9.1%. Combined with a $19.9 million sequential cut in marketing spend to 19.1% of revenue, the seasonal hit kept operating profit excluding distributor buyout fees growing 5.3% by our math despite weaker gross margins.
What to watch: Alani Nu fourth-quarter net revenue against last year's $370 million, which included an initial $25 million inventory load into PepsiCo warehouses. Holding above $370 million after Witch's Brew ends would prove the brand has built a higher year-round sales base.
International Sales Accelerated Toward the Long-Term Target
Management wants international markets outside the United States and Canada to exceed 15% of total revenue by 2031. That goal looked out of reach in the second quarter when overseas sales grew just 9.8% to $27.2 million, or 3.3% of the company total.
Overseas revenue jumped 77.5% from a year ago in the third quarter to $41.0 million, lifting the international mix to 4.8% of total sales. The beverage maker pointed to established Nordic countries alongside newer rollouts in the UK, Ireland, France, Iberia, Benelux, Australia and New Zealand. Reaching the five-year goal requires roughly 40% annual growth, and this quarter put the segment back above that pace.
What to watch: fourth-quarter international revenue and the 2027 rollout schedule for Alani Nu overseas. Sustaining growth above 40% before Alani Nu launches abroad would show the CELSIUS drink can carry the expansion on its own.
🐻 Bear Case
The Flagship CELSIUS Brand Is Shrinking Faster at the Register
"We continued to make progress to improve CELSIUS brand performance, while advancing operational execution across the portfolio," Fieldly said. Last quarter management expected third-quarter CELSIUS results to look similar to the second quarter, when net sales totaled $387.0 million and U.S. retail scanner sales dipped 2.0%.
Instead, the flagship brand weakened further. Company shipments fell 6.4% from a year ago to $356.8 million, missing the second-quarter dollar mark by $30.2 million because of "SKU optimization initiatives, shipment timing related to inventory rebalancing, and softness in the club channel".
- CELSIUS U.S. retail sales: down 7.0% from a year ago, worse than the 2.0% drop in Q2
- CELSIUS U.S. category dollar share: 9.1%, down from 9.5% in Q2 and 11.2% a year ago
- Rockstar Energy U.S. retail sales: down 13.2%, with dollar share slipping to 1.8%
- Total portfolio U.S. retail sales: up 14.7%, down from 31.0% growth in Q2
The retail drop cuts against Fieldly's claim of progress because consumer buying at the register shrank three times faster than in the second quarter, pulling total portfolio retail growth down by half. Cutting slow-selling package sizes explains lower shelf counts, but falling club-store demand and a two-point share loss over the past year point to shoppers switching to rival sugar-free drinks or to Alani Nu.
What to watch: fourth-quarter CELSIUS U.S. retail scanner growth alongside reported shipments. Shipments face an easy comparison against last year's 8% drop, so only a rebound in retail scanner sales from minus 7.0% would show genuine consumer recovery.
Aluminum, Fuel and Distributor Rebates Pushed Gross Margin Down
Celsius Holdings entered 2026 aiming for full-year gross margin in the low 50% range, then scaled back its third-quarter plan to stay near the second quarter's 48.1%. The company argues that combining Alani Nu and Rockstar into its manufacturing and freight network will lift profitability over time.
Gross margin instead fell to 46.8%, down 4.5 percentage points from 51.3% a year ago and 1.3 points below the second quarter. Cost of revenue — the expense of cans, ingredients and shipping — rose to 53.2% of sales from 48.7% a year earlier on "continued inflation in commodity costs, primarily aluminum and fuel, as well as a higher mix of DSD sales".
Lower raw ingredient costs and supply-chain savings could not cover can, freight and distributor-discount inflation. Because gross margin fell so sharply, profit excluding one-offs (Adjusted EBITDA) declined 3.4% from a year ago to $198.6 million even though revenue grew 16.8%.
What to watch: fourth-quarter gross margin as the new North Carolina production line starts up and Rockstar supply-chain savings flow through inventory. Another reading below 48% would show that commodity and distributor costs are outrunning integration savings.
PepsiCo Rebates Eat Up Over Half of Alani Nu's Retail Growth
Moving Alani Nu into the PepsiCo direct-store-delivery (DSD) network — where PepsiCo trucks deliver drinks straight to stores — put the brand into more outlets across North America. That arrangement also concentrated power in one partner: PepsiCo accounted for 64.6% of total company revenue in the third quarter ($547.4 million), up from 60.2% in the second quarter.
Selling through PepsiCo carries a heavy toll between retail checkout and reported revenue. While Alani Nu U.S. retail sales rose 57.9% from a year ago, the company's reported net sales for the brand grew 23.5% — a 34.4 percentage point gap driven by promotional trade investments, distributor billbacks and dropped non-drink items. On the balance sheet, accrued promotional allowances — rebates owed to distributors and retailers — jumped 55.6% since December to $479.2 million.
What to watch: the gap between Alani Nu retail sales growth and net revenue growth in the fourth quarter, once the December 2025 PepsiCo rollout laps its first anniversary. If net growth still trails retail growth by 30 points after the transition year ends, the lower price realization is permanent.
Risks this quarter didn't answer
Three standing overhangs — legal liabilities, preferred stock dilution and the 2027 product launch schedule — received no new detail in the earnings release.
- Legal and regulatory disputes: the company accrued another $1.2 million for legal settlements ($25.8 million year to date), with updates on the Strong Arm judgment appeal and Texas inquiry awaiting the 10-Q filing.
- Buybacks versus share overhang: management spent $44.5 million on buybacks in the quarter ($168.8 million year to date), cutting common shares by 2.0% since December while preferred stock took $27.4 million of third-quarter net income.
- 2027 innovation load-in timing: management previously promised to map fourth-quarter versus first-quarter distributor shipments on the third-quarter call, which was not included in the release materials.
👓 Other Themes
New Brand Presidents Appointed Under a Reorganized Structure
Celsius Holdings created a brand-led management structure and recorded $1.5 million in third-quarter severance costs. Fieldly hired Alex Zigliara as President of the CELSIUS brand and promoted chief marketing officer Rishi Daing to President of Rockstar Energy and Emerging Growth. Putting dedicated leaders over the two shrinking brands aims to sharpen retail execution and pricing, though any turnaround will only become readable in 2027 shelf resets.
💲 Other KPIs
Working capital eased from June but remained up nearly 30% from a year ago. Inventories fell 4.8% from the second quarter to $371.8 million (up 31.6% from a year ago, by our math), while accounts receivable — money owed by customers, 58.5% of it from PepsiCo — fell 9.3% from June to $666.6 million (up 29.8% from a year ago against 16.8% revenue growth).
The buyout bill for moving Alani Nu out of its old distributors is almost paid off. The balance sheet liability dropped to $2.1 million from $8.8 million in June and $264.1 million at the end of 2025. Income statement termination charges fell to $3.5 million from $80.9 million in the second quarter and $246.7 million a year ago.
Swung from a $70.7 million loss a year ago, when distributor buyout charges hit the income statement, and rose from $36.4 million in the second quarter. Out of $127.0 million in total profit, PepsiCo's convertible preferred stock — special shares that pay fixed dividends and share in earnings — claimed $27.4 million, leaving $0.39 per diluted common share ($0.41 excluding one-offs).
🔮 Guidance
Cut. The beverage maker dropped its second-quarter phrasing that supply-chain initiatives would lift margins over the rest of 2026, saying instead: "As these initiatives continue to mature, we expect to increasingly benefit from the platform we’ve built through the successful integration of our recent acquisitions." With year-to-date gross margin at 47.7% and third-quarter margin down to 46.8%, the original low-50s full-year goal is out of reach.
❓ Key Questions
What did the Q3 call say on Q4 load-ins?
Last quarter management promised to use the third-quarter call to map out 2027 product launch shipments across the fourth and first quarters. Because the press release gives no fourth-quarter revenue outlook, the call transcript is needed to read holiday shipment timing.
How much of Alani Nu's gain came from CELSIUS drinkers?
Alani Nu gained 2.6 points of U.S. energy drink dollar share over the past year while CELSIUS lost 2.1 points. Management has not updated its cannibalization estimate since citing roughly 15% in early 2025, before Alani Nu entered the PepsiCo system.
Why did Alani Nu's retail-to-net revenue gap stay near 34 points?
Alani Nu retail sales grew 57.9% in the quarter, but net revenue rose 23.5% as PepsiCo direct-store-delivery rebates and billbacks took a larger cut. Investors need to know how much of that gap fades once the December 2025 distribution shift laps.
When will packaging and freight savings beat aluminum inflation?
Third-quarter gross margin fell to 46.8%, missing the high-40s plan, and the release shifted margin expansion language from the rest of 2026 to the long term. What aluminum price or Rockstar cost saving is needed to restore a 50% gross margin?