Celsius HoldingsCELH

is heating up the energy drink market — challenging rivals Monster BeverageMNST

and Red Bull right where it counts — convenience stores. With record revenue in Q2 2024, Celsius reported a 23% year-over-year growth, driven by its sugar-free, “healthy energy” appeal that resonates with health-conscious consumers — fueling explosive demand.

Energized earnings: Celsius’ Q2 net sales surged to $402M as the company continued to drive strong velocity gains and expand distribution both in the US and abroad. Gross margins also bubbled up to 52%, from 49% a year ago, thanks to lower raw material and freight costs.

• North American revenue, which includes the US and Canada, jumped 23% to $382M.
• International sales fizzed 30% higher to $20M as Celsius gained traction in new markets like the UK and Ireland.

Taking the Fight to Monster and Red Bull

According to CEO John Fiedly, the brand now commands a 19.7% share of energy drink sales on Amazon, nipping at Monster’s heels at 21.8% and surpassing Red Bull’s 14% share. Retailers are also taking notice, awarding Celsius 35% more shelf space on average in the four weeks ending Jul. 14, 2024, compared to the last four weeks ending Dec. 3, 2023.

• Celsius sales have more than doubled in convenience stores over the past year, according to Circana, with retailers expecting 40%+ growth for the full year.
• 81% of c-store operators plan to allocate more cooler and shelf space to Celsius in 2024, the biggest expected increase for any non-alcoholic beverage brand.

Celsius is Down Nearly 55% From Its 2024 Peak

The energy drink category has lost some of its buzz in recent months amid mounting macroeconomic pressures. Category sales growth slowed to just 0.4% for the four weeks ended Jun. 15, a sharp deceleration from the 6.7% growth achieved over the past year.

And Celsius hasn’t been immune to the chill. The stock plunged 31% in Q2, its worst quarter in over a decade, as investors fretted about slowing sales and market share losses to Monster and Red Bull. News that distribution partner PepsiCoPEP

was trimming inventory also didn’t help sentiment.

However, Roth Capital Partners sees this dip as a buying opportunity, predicting US market share gains and international expansion.

Forward-looking: Celsius is taking steps to recharge growth and defend its turf. New flavor launches like Sparkling Watermelon Lemonade and an expanded on-the-go powder lineup aim to keep consumers engaged, while the company anticipates a larger sales force and targeted marketing investments should maintain brand visibility.

• Leveraging PepsiCo’s massive distribution network, Celsius aims to be in 200K US locations by year-end.
• According to Fiedly, the field sales team has grown by over 250% and is still hiring while continuing to ink new distribution deals in attractive untapped markets.

While Celsius navigates a challenging environment in the near term, its long-term growth story remains intact. With a proven track record, differentiated positioning, and open-ended global opportunity, Celsius has the ingredients to keep the energy flowing.