Celsius Holdings, Inc. (NASDAQ:CELH) shares traded lower on Wednesday.
The company’s third-quarter earnings per share were $0.00, missing the street’s target of $0.04. Quarterly revenue of $265.70 million (down 31%) missed analyst consensus of $267.11 million.
For the three months ended September 30, gross profit fell 37% to $122.2 million. The gross profit margin fell by 440 points to 46.0%.
The decline in gross profit was due to promotional allowances, incentives and other billbacks as a percentage of gross revenues.
“Pronounced supply chain optimization by our largest distributor, which we believe has largely stabilized, had an outsized and negative impact on our results of operations during an otherwise solid quarter,” said John Fieldly, chairman and CEO of Celsius Holdings.
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Costco Wholesale sales rose 15% in the third quarter; however, sales to Sam’s club and BJ’s were negatively impacted due to the timing of promotions and loading innovations in the prior year period.
Celsius’ sales to Amazon.com increased 21% year over year to approximately $27.0 million for the quarter. About 12.3% of Celsius’s total U.S. sales to PepsiCo in the third quarter were in the foodservice channel.
The company exited the quarter with cash and equivalents of $903.748 million. Net inventories at the end of the quarter were $197.572 million.
“Our strong balance sheet has enabled us to acquire Big Beverages, a long-standing co-packer of Celsius. We believe this will drive innovation and other efficiencies across the supply chain,” said Jarrod Langhans, Chief Financial Officer of Celsius Holdings.
In November, Celsius acquired Big Beverages Contract Manufacturing, giving it a modern, 170,000-square-foot manufacturing and warehouse facility.
Price promotion: CELH shares are trading 6.4% lower at $29.70 premarket at last check Wednesday.
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This article Energy Drink Maker Celsius Misses Q3 Earnings as Supply Chain Optimization Weighs Margins: Details originally appeared on Benzinga.com
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