Celsius Holdings (CELH) grew revenue 16.8% year over year to $847.2 million in fiscal third-quarter 2026, with Alani Nu gaining market share and operating metrics improving from the previous quarter. Higher investment in distribution, along with elevated diesel and aluminum costs, continued to weigh on margins. The company said gross margin could return to slightly above 50% over the medium term, depending on cost trends and progress in adjusting its sales channels.
Alani Nu lifts share to 9.8%
Celsius held a 20.7% share of dollar sales in the energy-drink MULO+W/C channel in the third quarter, up 0.6 percentage points from the prior quarter and unchanged from a year earlier. Competitors lost ground: Monster's share was 31.4%, down 0.8 points sequentially and 1.6 points year over year. Red Bull stood at 33.4%, down 1 point from the previous quarter and 1.6 points from a year earlier.
Alani Nu was a key contributor to Celsius' share performance. The brand's share reached 9.8%, an increase of nearly 3 percentage points year over year. Celsius said sales of Alani Nu's core products rose 50% from a year earlier. The Witch's Brew launch generated more than $130 million in third-quarter retail sales, while sales of its 12-ounce core products were nearly 80% above the year-earlier period. Some of the best-performing products have become permanent core offerings, helping stabilize the brand's product mix.
During the first half of 2026, Celsius adjusted retail displays, expanded shelf space and sought more prominent placement in coolers, endcaps and high-traffic areas. Its direct-store-delivery (DSD) network also extended product replenishment coverage. The company said the changes improved product availability and visibility in stores, although the operational effects of switching and integrating channels are ongoing.
Revenue improves sequentially, but margins remain under pressure
Celsius reported an adjusted EBITDA margin of 23.4% for the third quarter, up 0.9 percentage points sequentially but down 4.9 points year over year. Adjusted earnings per share were $0.41, up 13.8% from the previous quarter and down 2.3% from a year earlier. The figures point to a sequential recovery, but margins have yet to return to last year's levels.
A larger share of sales through DSD has brought higher channel investment. Changes in product mix and elevated diesel and aluminum prices have added to cost pressure. Year-to-date gross margin was 47.7%, down 3.9 percentage points year over year. Management's medium-term target is a margin slightly above 50%, but the timing of any decline in raw-material costs remains uncertain.
The company is expanding production lines in North Carolina and pursuing direct sourcing and lower trade spending in the DSD channel to improve its cost structure. Year-to-date adjusted EBITDA margin through the third quarter was 23.6%, down 3.4 percentage points from a year earlier. Free cash flow for the same period was $398.98 million, a decline of 11.9%, partly reflecting higher inventory. Third-quarter inventory totaled $371.81 million, up 31.6% year over year.
International growth and brand integration in focus
Celsius is targeting international sales of more than 15% of total revenue within five years. International revenue rose 77.4% year over year in the third quarter and accounted for 4.8% of the total, up 1.7 percentage points from a year earlier. Growth will depend in part on local partnerships and further expansion of Alani Nu.
Celsius also plans to launch Thanksgiving- and winter-themed products for CELSIUS and Alani Nu in the fourth quarter of 2026, while working with distributors and retailers on plans for 2027. Celsius, Alani Nu and Rockstar target different consumer groups, and the company has organized its operations by brand. The results of integrating Rockstar and Alani Nu, as well as progress in distribution and sales, will need to be assessed in subsequent earnings reports.
The consensus expectation for Celsius' annual revenue growth through fiscal 2028 is 14.1%, below the company's 80.7% compound annual growth rate over the past five years. That historical growth rate does not guarantee future performance; meeting expectations will depend on brand integration, market-share gains and international expansion.
Shares pull back; valuation below historical averages
At the time of publication, CELH had recovered from just above $20, its 2026 low, to the $30 range, while the broader market's decline over the same period was in the low single digits. The stock had been consolidating since May 2026 and previously touched around $23. Volume-based indicators placed the shares in oversold territory, and the RSI also suggested oversold conditions to some extent. Neither technical measure determines the stock's future direction.
CELH traded at 3.14 times forward enterprise value to sales and 14.10 times forward EV/EBITDA, below its five-year averages of 7.76 times and 50.32 times, respectively. Among beverage companies, forward EV/EBITDA stood at 12.43 times for PepsiCo, 25.48 times for Coca-Cola, 28.44 times for Monster and 13.36 times for Keurig Dr Pepper. Celsius' multiples were lower, but its margins also lag some peers, so comparisons need to account for growth and cost trends.
Year-to-date free cash flow was $398.98 million, and the company had net cash of $32.86 million, up 159% year over year. Over the past 12 months, Celsius repurchased shares equivalent to 1.1% of its outstanding stock, with $91 million remaining under its buyback authorization. Inventory growth, DSD integration and a potential recovery in gross margin remain key operating measures to watch; the share-price consolidation and valuation multiples do not remove the execution risks.