Celsius hit record sales. Its namesake brand went the other way.
Alani Nu is now the bigger revenue contributor, while CELSIUS sales and group margins face pressure. Earlier shipments also leave a tougher fourth-quarter comparison.
Celsius Holdings reached a record $847.2 million of third-quarter revenue, helped by Alani Nu's rapid expansion. Its original CELSIUS brand went the other way: reported revenue fell 6.3%, and measured U.S. retail sales dropped 7%.
The gap shows why owning a larger energy-drink portfolio has changed the investment story. Alani Nu now generates more quarterly revenue than CELSIUS, while higher costs and distribution changes mean the group's sales record has not produced a record profit margin.
Alani Nu is doing the heavy lifting
Alani Nu's revenue rose to $410.1 million from $332 million a year earlier. Its Witch's Brew seasonal flavors helped, alongside more distribution through PepsiCo's network. The company said the brand's underlying retail business also grew strongly without that seasonal release.
Alani Nu's 58% growth in tracked U.S. retail sales was much faster than its roughly 24% reported revenue growth. The measures cover different markets and products. Moving more sales through PepsiCo's delivery network also brings higher promotional allowances and distributor payments that reduce the revenue Celsius records.
Rockstar contributed $80.3 million, compared with $12.2 million in the prior-year quarter, when Celsius owned the U.S. and Canadian business for only part of the period. That acquisition timing accounts for a substantial part of the group's 17% reported growth.
At CELSIUS, management points to a narrower product selection, inventory reductions by distributors and weakness in warehouse-club sales. International growth helped offset those pressures. Chief Executive Officer John Fieldly expects new products and better retail execution to return the brand to growth during 2027.
Some of the record quarter arrived early
Chief Financial Officer Jarrod Langhans said $20 million to $25 million of shipments planned for the fourth quarter moved into the third. All three brands benefited. Alani Nu's growth still accelerated from the previous quarter after removing that timing effect, he said.
Those earlier deliveries leave less revenue to record in the fourth quarter. The comparison also includes roughly $25 million of net inventory-building benefits in the final quarter of 2025. New-product shipments ahead of January launches should partly offset the headwinds, but management expects slower reported growth than in the first nine months.
The margin recovery remains unfinished
Gross margin, the share of sales left after product costs, fell to 46.8% from 51.3% a year earlier and 48.1% in the second quarter. Higher aluminum and fuel prices, together with the growing share of sales through the delivery network, outweighed supply-chain savings.
Research by Ticker Byline shows that August's margin expectation had already been qualified by a fuel-cost warning before the latest results. Management originally expected the third-quarter margin to be broadly consistent with the second quarter, in the high 40s. At September's investor conference, it flagged rising fuel costs while still referring to that expectation.
The latest margin came in below that earlier description. Management continues to expect a full-year margin in the high 40s, depending on commodity costs. It is counting on better purchasing, manufacturing and promotion planning to improve profitability through 2027 and 2028.
There was progress further down the income statement: overhead consumed less of each revenue dollar, lifting the adjusted EBITDA margin to 23.4% from 22.5% in the second quarter. Compared with a year earlier, however, adjusted EBITDA fell 3.4% to $198.6 million. Adjusted earnings per share slipped to $0.41 from $0.42.
Reported net income recovered to $127 million from a $61 million loss. The earlier period included $246.7 million of distributor termination expense, compared with $3.5 million this quarter. That large accounting improvement therefore tells a different story from the slightly lower adjusted profit.
A new structure for the next stage
Celsius is creating three U.S. business units with dedicated brand leaders. Alex Zigliara will lead CELSIUS; Rishi Daing will lead Rockstar Energy and Emerging Growth. A search is under way for an Alani Nu president, with shared sales, marketing and operations supporting the units.
Our Celsius company profile tracks the completed acquisitions, cash flow and financing behind the larger portfolio. The next test is whether the new structure can help CELSIUS recover while turning Alani Nu's growing shelf presence into stronger group margins.