Growth investors thirsty for a consumer-facing name that is bucking the general market malaise may want to crack open a can of Celsius Holdings (CELH -0.12%). Shares of the distributor of functional energy beverages initially moved higher on Thursday after posting another blowout quarterly performance

Naturally, a lot of stocks skyrocketed during Thursday's historic rally. Celsius just happened to be moving higher in Wednesday after-hours trading on the heels of its monster report, well before Thursday morning's tame inflation numbers got investors giddy.

Thursday's 13% gain was refreshing, but a lot of growth stocks broke through with double-digit percentage gains for the day. Celsius stands out for cranking out months of gains, up 133% since bottoming out in May. In short, Celsius stock was rallying before rallying was cool. 

A sprinter leaving yellow smoke behind.

Image source: Getty Images.

Burning calories but not investors  

The bad news is that Celsius' streak of quarters with triple-digit revenue growth came to an end this week. The good news is that you won't find too many people complaining about the 98% year-over-year gain that it just reported. In terms of market expectations, analysts were settling for a 71% increase on the top line. 

Celsius continues to tear it up on its home turf. North American sales soared 112% in the third quarter, accounting for more than 95% of the $188.2 million it reported in total revenue. Europe continues to go the other way, but at less than 5% of the business, it's not really moving the needle anymore. If anything, Europe now becomes more a potential opportunity than a liability after its recent distribution deal with PepsiCo (PEP 0.80%), which carries some promising global implications. 

There was a huge net loss of $186.5 million in the beverage distributor's quarterly report, but that was largely the negative impact of a $155.4 million hit related to termination expenses of prior distributors ahead of the promising PepsiCo deal. There will be another $50 million hit as a results of the transition in the current quarter. It's still red ink on a reported basis, but things get better on that front. Gross profit and adjusted EBITDA for Celsius rose 109% and 142%, respectively, in the quarter.   

This kind of growth is always going to be impressive, but it's notable that Celsius is taking big steps in a climate where many consumer goods companies are experiencing sluggish sales in this dicey economy. Even in its growing energy drink category, Celsius is making waves. According to retail data scan tracker IRI, Celsius overtook Bang last month to become the third-largest energy drink brand, behind Monster (MNST 0.33%) and Red Bull. The 4.9% sliver of the energy market at multi-outlet retailers and convenience stores may not seem like much, but according to IRI, Celsius accounted for a whopping 29% of the category's growth in the third quarter. 

The really exciting part about Celsius bumping to the bronze medal podium last month is that October just happened to be when the PepsiCo distribution deal kicked in. PepsiCo invested $550 million in Celsius this summer for an 8.5% convertible preferred stock stake in Celsius over the summer. Bringing on the beverage giant as a minority shareholder also came with rights to be Celsius' primary distribution partner in the U.S. and its preferred partner overseas.

We're now just weeks into PepsiCo's run as Celsius' stateside distributor, and things are going well. Celsius was doing just fine getting its product out there before turning to the pop star. The number of locations across the country where you can buy it -- 174,000 -- is already 54% higher than a year ago. But Celsius said in its earnings call that PepsiCo's distribution agreement is helping accelerate that expansion. PepsiCo is also helping give Celsius more shelf space. The average number of Celsius items carried per store rose roughly 8% through the first three weeks under PepsiCo distribution. Total sales per store is up 11% since October. 

Celsius didn't offer hard guidance, but it's encouraging to see how the new U.S. distribution deal is leading to improving results in the current quarter. Isn't it just a matter of time before the two parties start working together to get Celsius going again overseas, where PepsiCo has a global presence and proven track record?

Celsius is shaking up the ranks of stodgy beverage stocks, and the future is bright as it stands on PepsiCo's giant shoulders. The stock was already a generational wealth creator -- a 17-bagger over the past five years -- but it's just scratching the surface. Growth will inevitably slow, but its functional energy drinks that are a hit with the active fitness community can't be discounted in this mainstream push.