There's an earnings season beat, and then there's the consensus-trouncing performance that Celsius Holdings (CELH -0.50%) landed shortly after Tuesday's market close. There was already a growing sense that the fast-growing distributor of energy drinks was going to have a strong quarter. A few bullish analyst notes came out just ahead of this week's actual financial update. It was still a bigger beat than what even the most bullish Wall Street pros were expecting.
Celsius generated $290 million in revenue for the first quarter, a 95% surge over the past year. Wall Street was settling for $218.8 million, a 64% year-over-year advance on the top line. North American revenue -- accounting for 96% of the sales mix -- more than doubled with a 101% pop. Celsius is clearly doing well on its home turf, and things could be starting to fizz elsewhere as the away team with PepsiCo (PEP -0.41%) as its new distribution partner.
Making the bubbles last
The beat doesn't end with the record revenue results. Celsius' earnings more than quadrupled to $34.4 million -- or $0.40 a share. Analysts were banking on a profit of just $0.20 a share. After back-to-back quarters of posting larger losses than expected, Celsius didn't just turn the corner. It floored it after it rounding the curb.
Even if we turn to the rosiest of analyst models, the high-water mark was calling for Celsius to earn $0.25 a share on $245 million. Celsius stepped up bigger than that, largely because it is bigger than that.
Celsius has become a phenomenon. It has seen its market share in the country's energy drink market double to 7.5% over the past year. Its differentiated product goes beyond the classic niche of providing sippers with an energy boost. Celsius has a proprietary blend of ingredients that trigger thermogenesis, taking a body's temperature up a step to the point where it can improve your metabolism and burn more calories.
Image source: Getty Images.
Wall Street's trying to keep up. Most of the updated notes in recent weeks are jacking up price targets on the stock, and a resounding theme was that a beat was coming. Mark Astrachan at Stifel was one of the last to check in, bumping his revenue growth forecast for the first quarter to 76%.
It was hard for investors to keep pace with the growth at Celsius when it was on its own. Things are moving even faster now with PepsiCo as a partner. The pop star invested $550 million for an 8.5% convertible preferred stake in Celsius. The move also resulted in PepsiCo becoming its distribution partner here and potentially abroad. There's a global market out there to carve up, and with PepsiCo on its side it will be easier to be a globetrotter without the rookie mistakes of worldwide distribution.
Celsius naturally won't always be growing at the same heady clip it's doing now. The the bubbles in an opened sparkling beverage can, the fizz isn't sustainable. However, Celsius has set itself apart in the historically ho hum realm of slow-growing beverage stocks. Celsius gets it. Let's meet back here in three months to see if Wall Street is getting any better at catching up to this growth business.
