Celsius Holdings (CELH) Q2 FY26 earnings call: guidance and Q&A

Given current weakness in tracked data, what gives confidence in CELSIUS's improved performance exiting '26 and into '27, and what does success look like in the next 6-9 months?

Management expressed confidence in CELSIUS's recovery, citing a strong consumer base, robust innovation plans for '27 (including a new 16-ounce offering), and successful retailer meetings. They highlighted the strategic decision to prioritize Alani and Rockstar integrations, which is now complete, and the overall strength of the portfolio in driving category incrementality.

“The base business within CELSIUS is strong. It has an extremely healthy consumer base. And we have robust innovation plans in the works for '27.”

asked by Peter Grom · answered by John Fieldly

Was the SKU rationalization the right decision, and would anything have been done differently? How much risk is there of further sales pressure in Q3 for CELSIUS?

John Fieldly admitted they "went too deep" on the CELSIUS rationalization, acknowledging they would have cut fewer SKUs. However, he emphasized adapting to challenges, with robust innovation plans for '27. For Q3, he reiterated expectations for performance similar to Q2, noting they are cycling prior-year innovation, which will continue to impact comps.

“I think one thing -- I think we did. We went too deep on the CELSIUS rationalization. I think when you look at we're entering the year, we could have done a much lighter job on that, but then there's also puts and takes.”

asked by Bonnie Herzog · answered by John Fieldly

How does the company plan to manage difficult comparisons, especially with a big comp on Alani's LTO in Q4 and simultaneously trying to reverse CELSIUS trends?

Management explained that while Alani's Witches' Brew LTO will face a comp, they expect it to be bigger than ever. The strategy for Alani is to build out the base portfolio, making LTOs less relevant to total revenue over time. For CELSIUS, innovation plans for '27 are robust, and they expect to cycle optimization impacts and return to growth. The overall portfolio is set up for success in '27.

“Now how do we continue to grow those comps on the Alani portfolio? That's building out that base portfolio. So over time, the LTOs become less relevant to the total top line revenue because you're building out that base business, that base SKU count, building that loyal consumer and that repeat purchase.”

asked by Kaumil Gajrawala · answered by John Fieldly

Can you provide more detail on the magnitude of CELSIUS's recovery in Q4 and its run rate for FY'27? Also, what is the pacing of international expansion?

For CELSIUS, Q4 will benefit from cycling prior rationalization impacts and expanded distribution with permanent fixtures. Jarrod Langhans noted a softer year-over-year comp for reported revenue in Q4 for CELSIUS, potentially leading to an opposite direction versus scans. For international, John Fieldly highlighted it as an "amazing opportunity" with strong foundations being built, green shoots in various markets, and plans to launch Alani internationally in 2027, aiming for >15% of revenue over time.

“If you look at, just in general, brand CELSIUS, as John talked about, you'd see the build come through the scan data. Wouldn't necessarily look for a direct snapback, but that's from a scanner. From a reported perspective, we do have a softer comp year-over-year that would be seen in Q4.”

asked by Jim Salera · answered by Jarrod Langhans

Where does the company stand on shelf space gains versus original targets, especially for permanent space? What guardrails are in place for innovation to prevent SKU proliferation?

Jarrod Langhans stated that some permanent space gains, particularly for fixtures and cold space, were slower than expected but are now coming to plan, with a large retailer's space picked up in July. John Fieldly explained that SKU optimization is an ongoing process of replacing the tail with new, incremental innovation rather than just cutting. The strategic change is to drive incrementality with new permanent innovation to maximize shelf space and disrupt the path to purchase.

“I think that's the most important thing. We need to continue to drive incrementality with the portfolio, make sure we continue to leverage the maximum billboard so we can disrupt that path to purchase, and versus cutting tail, replacing it with new innovation that's permanent throughout the year.”

asked by Eric Serotta · answered by John Fieldly