We're still almost two months away from the end of 2023. Companies that focus on health and wellness are starting to look forward to the New Year's resolutions many people make to get fit in 2024, as it often proves to be high season for many such businesses.
Yet shareholders didn't have to wait until January to get good news from a couple of stocks that have benefited from interest in fitness. Shares of Celsius Holdings (CELH 2.12%) and Planet Fitness (PLNT 0.65%) both got a big lift on Tuesday morning, and shareholders are excited about their prospects to keep gaining momentum and delivering strong share-price gains. Here's the latest from the two high-growth stocks.
Celsius bubbles over with growth
Shares of Celsius Holdings climbed another 7% early Tuesday, adding to gains that have caused the fitness drink maker's stock to almost double so far in 2023. Third-quarter financial results showed the ongoing interest in Celsius' products during the summer months.
The numbers from Celsius were outstanding. Revenue of $385 million for the third quarter was up 104% year over year, as North American sales climbed 107%. Gross margin for the quarter soared by nearly 9 percentage points to 50.4% as Celsius saw costs for packaging and raw materials decline. The company was also more efficient with promotional activity, freight practices, and product waste. All those factors helped Celsius post earnings of $0.89 per share, reversing a big $2.46 per share loss from the previous year's third quarter.
Celsius celebrated a number of milestones. According to the latest available data, Celsius passed up Monster Beverage and Red Bull in sales on the Amazon e-commerce marketplace during the quarter. The distribution arrangement that Celsius has with PepsiCo also helped sales in other retail channels, with an 83% jump in club channel sales.
Shareholders were already excited about Celsius' recent decision to do a 3-for-1 stock split. With evidence from the quarterly report showing that its high-growth story is intact, and investors have high hopes that the Pepsi collaboration and buzz about the company's growing product line could help spur further sales gains in 2024 and beyond.
Planet Fitness bulks up
Planet Fitness saw an even bigger share-price move, as the stock rose 13% following the release of its third-quarter financial report. After having struggled during the early years of the pandemic, the gym operator has returned to growth and is capitalizing on rising demand from customers.
Planet Fitness reported revenue of $278 million for the quarter, up almost 14% from year-ago levels. Systemwide same-store sales were up 8.4%, and adjusted net income jumped by 36% year over year to $51.8 million. Adjusted earnings came in at $0.59 per share.
Planet Fitness also got a boost from 26 new locations coming online during the three-month period, nearly all of which were franchisee-owned. That brought the total gym count across the Planet Fitness network to nearly 2,500 as of the end of September.
Investors were also pleased at upbeat guidance from the fitness center operator, which now sees adjusted earnings for the full 2023 year rising 35% from 2022 levels. Given how strong 2022 was operationally as people returned to the gym after having relied largely on at-home alternatives in 2020 and 2021, Planet Fitness' ability to keep gaining ground has made shareholders happier than ever heading into 2024.
