Celsius (CELH) Stock Jumps 14% on Surprise Earnings Announcement Timing

TLDR:

Celsius (CELH) stock surged 14% after unexpected announcement of Q4 2024 earnings release and investor conference participation

Company will report earnings Thursday after market close and present at Consumer Analyst Group conference Friday

Previous quarter showed declining sales (-30%) and missed Wall Street estimates

PepsiCo’s inventory adjustment has impacted Celsius’s recent performance

Analysts expect Q4 sales of $328 million (-5% YoY) and EPS of $0.11 (vs $0.17 YoY)

Investors drove Celsius Holdings (NASDAQ: CELH) shares up 14% on Wednesday following the energy drink maker’s unexpected announcement about its fourth-quarter earnings release and conference participation plans.

The company revealed after Tuesday’s market close that it would report its Q4 2024 financial results on Thursday after market hours. Additionally, management will present at the Consumer Analyst Group of New York Conference on Friday morning.

The timing of these announcements caught market attention, as companies typically provide such notices weeks or months in advance. The short-notice schedule prompted speculation among investors about potential positive news, leading to Wednesday’s stock rally.

This market response comes amid increasing short interest in Celsius stock, with bearish investors betting against the company reaching near all-time high levels in early 2025.

The energy drink manufacturer has faced recent challenges, particularly in its relationship with major U.S. distributor PepsiCo. Supply chain adjustments by PepsiCo have led to reduced orders, impacting Celsius’s financial performance.

These distribution challenges were evident in the company’s third-quarter results, where total sales dropped 30% compared to the same period last year. The company barely achieved break-even status, a sharp decline from the previous year’s earnings of 30 cents per share.

Market analysts have set expectations for the upcoming fourth-quarter report. According to FactSet, they project sales of $328 million, representing a 5% decrease from the same quarter last year.

Earnings predictions for Q4 2024 stand at 11 cents per share, lower than the 17 cents reported in the year-ago period.

Energy Drink Sector

The energy drink sector faces broader challenges, including concerns about consumer spending patterns. Established brands like Red Bull and Monster Beverage are actively working to regain market share, while new competitors continue to emerge.

The timing of the earnings announcement has sparked particular interest given the company’s recent performance challenges. Some market observers suggest the quick turnaround between the announcement and the actual report could indicate positive developments.

However, the unusual timing alone doesn’t guarantee favorable results. The company’s actual performance numbers and future guidance will be crucial factors for investors to consider.

Wall Street analysts anticipate a recovery for Celsius in 2025 as PepsiCo’s supply-chain adjustments stabilize. The upcoming earnings call and Friday’s conference presentation will be closely monitored for insights into the company’s 2025 outlook.

The stock’s movement reflects the market’s reaction to the timing rather than any confirmed information about the company’s performance. Trading volume increased substantially during Wednesday’s session as investors positioned themselves ahead of the earnings announcement.

Short sellers appeared to be reassessing their positions following the news, contributing to the upward pressure on the stock price.

The company’s share price has experienced volatility in recent months, with particular pressure since May when the PepsiCo inventory adjustments began impacting results.