CELH - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to Celsius Holdings’ First Quarter 2022 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cameron Donahue, Investor Relations for Celsius Holdings. you. Thank

begin. may You

Cameron Donahue

good Celsius We earnings Holdings’ and us conference you today for first afternoon, you appreciate everyone. joining call. Thank quarter XXXX

President and on Chief Officer. me the today John Joining call Executive Langhans, Jarrod Fieldly, Officer; Chief Financial are and

will press remarks, call the website, close all afternoon release will upon we and The company materials to that and available company’s given market celsiusholdingsinc.com, at Following Investor time. questions in will released instructions Relations open prepared your be the their the be earnings under this section.

extent John remarks. update obligations press President required you our the by XX, law, reminder, before Please over contained any let’s With Safe a Chief many for over We Harbor this audio turn of in call statements to statements the forward-looking any our As an uncertainties, XXXX. aware to risks and on based filings duty the replay be be turning are call John? Except that encourage prepared today. Fieldly call review Officer, statements no later are statements. numerous disclaims and these today’s Celsius Holdings These undertakes to to to forward-looking contain for forecast, which available that, expectations and John, additional May may information involve that including other the the will available to Executive company’s his quarterly beyond release also SEC and information. control. of and management as with

John Fieldly

Chairman. us for joining today. Good thank you, afternoon, you Thank and everyone

compared a number driver XX% XXXX, XXXX. of quarter MULO the our Celsius XXth trailing data category XX, consecutive as record to of the of period. is X-week represented growth the fourth quarter Our over energy in brand the first and IRI sequential growth one increase April According to quarter

growth, dollar and by last the by Bull Celsius energy X.Xx, Alani accounting This Xx. XX% is eclipsing $XX Nu million. X-week X.Xx, period, of for dataset, category X.Xx, total. the Xx added Ghost that CX the of Monster the share by $XXX by In grew million Red growth For by

provider which XXX offerings, the our expanded locations distribution bringing as quarter, our the an During placements into position X,XXX channels, share store club category. the in $X.X a we in in channels those official on this a additional we and been of and stores all on In XXXX compared well percentage Club channels two leading to the across And now across fitness locations locations. CycleBar channels we to million country cooler over nationwide average revenue non-tracked Sam’s rollout through surpassed quarter. foodservice number doubling Circle energy March, channel, growth about full two over the the and In with are in metric for channel K four new we the the totals drink first newest This In X facings expanded energy Wal-Mart began with $XX.X driving the more and in as nationwide count launch. the incremental began now to period, Celsius convenience expanded Rockstar channel, than of growth total the the a stores driven now first also adding a increased X,XXX including rollout for number nationwide. has to the and select vending also partner stores. with of alone

Celsius Langhans, launch. formally month our like our would of QX share since we increased team. with our sales excitement I the addition, appointed Lifetime On and each since we CFO. him are one launch him Negron join our having announced the now and today XX, of to April the drink selling retirement introduce In number Edwin have Fitness, Jarrod and

commitment to his In over Edwin addition, lasting thank impacts. years, and provide will the I’d for to positive the the continue contribution company for which like to

Head many welcome like joined our team, ahead. We members Clark as see keep [ph] with new IT to of who our addition Grace as and organization the and continue we other to would added her our have team team. maximize to welcome we to recently we have to opportunities growth also new them And the in pace expand Celsius the

any to to to regards quarter, SEC, fully operational continue Before cooperate in not I at move and time. we do this previously highlights have disclosed the material our updates we for

of store Moving sales million United quarter, $XXX exceeding hit $XXX to the quarter in another in achieving over was DSP in sales, highlights network exponentially. hitting growth our first our the and growth cold as some growing States million optimization of additional revenues expansions, and of underrepresented record financial first Revenue additions, driven as new activation channels. by placements well flavor the continued

$XX store, vending. As and for of up from club we the mentioned see Sales in million XXXX prior quarter. the convenience million, in first expansion in year XXX% we great $XXX.X totaled the quarter

million immune XXX% from to result million flavor for of net up gross a the the increased to and months $X.X industry. pressure $XXX.X XX.X% year we quarter. impacts. increased revenues $XX ending million, and with trade million. from for continues have the domestic And proximately $XX.X excluding outbound campaigns, $X.X not a $XXX million $X.X sales delays, excluding chain mentioned, and totaled totaled revenues of launches international grew XX, million other as outbound supply to million of million when XX.X% to quarter. up quarter, sales XX.X% timing the or freight beverage March approximate XX% margins the sales in been quarter to the Gross to XXXX Nordic as as year XX% these year well XX.X% XXX% X of $XX.X prior margin sales quarter for approximately the approximately and from to in As decreased felt across ago for freight be prior record International down profit There

through cans, production, materials shipping, of with our full model expansion international cases majority efficiencies offset a cost these our cost of of raw been have load miles of higher on reducing last With the warehouse fall. increases expansion the X-orbit scale by

also channel in mix lower impacted rapid which as drive pressure. margins quarter margin secondary margins moving including we margin then externally to cans end revenue the sales has Our of product revenue system. have has our working due margins facilities, growth by contributed initiated mid-XXs levels this over $XX improve towards the still of in our international to with the cycle co-packers this remaining in mix. the club million with in our overall up required rework increased to further repack on has quarter Overall, channel channel, had are out of which to the channel first channel, changes and expects several back the partners company the and cost through based with the third the And

Walmart network levels Sam’s rate first third a during few. XX% to optimization accounts Club, and been normalized Our place expanding XXXX Circle quarter and improvements rates inventory resets the well accelerated we due key infrastructure maintain as expansion with X-orbit name national with put around quarter to roughly software growth fill these in our spring the model our an fill and expansions to distribution as load-ins warehouse expansion of has and the experiencing K new to of just to which rates a expect our were about even – optimization

first Some additional the quarter. highlights for

to year. million triple-digit growth DSD – in world activation $XXX.X retailers in driven Our our domestic trade channels store expansion triple traditional with XXX% growth and in our was class distribution grew partners. of approximately prior of when by compared network, fuller Direct the growth distributor – revenues revenues with our to accelerated our delivery,

channel $XXX in Our grew million incremental the first vending XXX% quarter and revenue. drove approximately in over

We one now over by their product. Fitness is – are in growth GNC in the XXXX, CycleBar, XX% Lifetime quarter fitness sets offerings specialty are to and our expect XX,XXX with solid rest and through our lied the corporate in and the vending with of drink increasing being with year. first locations quarter, now number addition number to vitamins officially placement launched channel, XX continue in locations. the which core we ordering partnered of franchisees In of since expanded their the micromarkets at partnership also at that

expect the better the locations $XX.X with according our the sales we upon the first April data, addition locations average in weeks Our initiated transaction gaining XX,XXX XX, and and new of now new continue also with we the same totaled continues chains store with XXXX also energy share at – as which of national for X,XXX share, Industry-backed million, and in channel, convenience the with for confident the even X,XXX% now sales XX% record second which period. XXX% over under accelerate store for shelf X.X% quarter on a quarter category, of terms we and This we store share, Amazon program, be record our compares to expanded we locations third-party demand showing in on as Red the data full total We XX% and record for for In additional for energy of recent well as sales share have opportunities XXXX. by in channel, in significant this, locations. X-Eleven drink a count to at quarter in network weeks, and also penetrating Celsius of the report our X all of store X, second saw that as the X levels first overall the XX-week size Costco’s category X-Eleven placements will growth ACV revenues the the over Monster of are our XX.X% is expanded DSD X channels Circle mass largest NCAP and from Celsius for accelerated which we quarter second optimization saw to K weeks, DSD first established weeks with XX.X% following front-end in throughout largest largest data K QX locations. higher gain Circle Amazon, through On expanded in indoors XXXX. year-over-year launches we The XXX% RaceTrac completion, over traction the Costco XXXX began our growth XX Sam’s with only price with to our convenience period. at over quarter. locations NCAP quarter growing club to cooler quarters energy and a and energy Bull In opportunity club Nielsen channel quarter in-product to online three XXXX convenience increase launch, of continue between quarterly accounts XXXX. up at and a April QX and Celsius shelf XXX% revenue most the being metrics continues our show on drive channel placements to first We in a availabilities penetrating with rollout fully totaled rollout sales Stackline in XXX ahead category. converted Celsius through a totaled expanded channel locations and further our by two nationwide drink X.X% we first expansion additional ending X% of XXXX Costco.com. X.X a from accelerated of and the approximately behind to the of in assortment weeks, data chain-wide energy to of of in-store in activity on increased new that’s continue convenience our full with over scan placements XXXX, a Celsius additional select in we Consumer U.S. was increase the XX.X% as placements. the share to and the Walmart, category, and XXXX X platform Nielsen up existing approximately completed the XXXX to the XX XXXX. of XX.XX% and transitioning just With X,XXX April in of which XXX hit has – growth chains share coolers to see we channel. locations total the store with in and flavor will grew first across weeks that BJ’s Target, of Club ahead sell-in XX% shelf that

company the during approximately distribution population. compared availability. We the see when has continue the the are now see expanding in of all revenues channels The additional We to national year. our of acceleration services agreements to to accounts secured which and now quarter DSD This beginning to our network. completed prior through delivered conversion further from network, lift additional growth our the now of distributor XX% nationwide XXX%

in in over now Celsius of rollout coolers and the Our X,XXX key coolers branded first with over expanding retailers. placed was coolers XXX quarter placed nationwide

also tool growth leverage tracking have comprehensive with a acceleration retailers. We to implemented metrics

premium In placements XXX locations barrel at were we XXXX. retailers. continue to addition, over through cooler in And key anticipate coolers additional placed

from Our co-packer we U.S. growing front, our door nationally On XXXX. locations existing at our XX% XXX,XXX doors scale QX expand or XX,XXX now exceeds and our partners count continue lifetime over locations XX,XXX to from priority. improving

well delays. flavor launched costs are decrease that’s optimize EU – Great U.S. timing protect Germany timing Our as the stocks six Europe, of of launched flavor, flavors ahead. result well recently In approximately of this for third as our three beginning to in of campaigns, active snack to million, of with launched flavors footprint fast totaled co-packer our launches portfolio well and we and Celsius. as which as help that which future total second supply as XX% quarter. continue Celsius flavors and of trade our And will translation with protein totals and expect translation three growth of now Britain, XX We $X.X chain a as a with and sales support out Amazon

additional to XXXX expect through France We EU take place and include momentarily. Italy launches

becomes we the future based XXXX small a China, opportunities fixed maintain are In then model, lower see revenues a international ahead. revenues the volume of with Additionally, today, our South other with but Kong, tremendous through royalty in discussions but royalties model driving which royalty than as And no licensing in market, opportunities Malaysia, with we minimum Hong Singapore Australia and locations million. initial markets growth market $X.X as Taiwan. includes Japan, Korea penetrating and well

with, approach drive our top profitable on these revenue, focus to and to to continue partner growth markets opportunities. distributors revenue find We in to

targeting first the front, integrating and robust marketing new kicked continue which work a consumers quarter, we moving Super In and marketing they activate to Now, existing emotional kicked we event. the and into the off live, we a at Celsius which Live great Essential through Vibes meaningful Celsius through initially building front, marketing funhouse, where activate on our off Tour programs. and Tour, to during play was continue the Fit connections Bowl Shaq’s

also we with to partnered activation. in of around a the Passionfruit In flavor, items nationwide, Olympics was did launched a and for lot great successful a addition, a we which name X-Eleven Mango also White Shaun which a launch And accomplished. we very just us few

connect continue We energy activate Celsius the and portfolio in consumers bringing to a meaningful way, to and category. consumers with new

in to category. leading demographics category and channels, percentage outside bringing are consumers the We energy of our expanding accelerating growth industry while by new driving leading and all across in category an energy the from the growing share

for our Langhans, Financial opportunity. prepared Officer his We have over committed Chief infrastructure and call now turn the the Jarrod to resources maximize Jarrod? operational I our both personnel will remarks.

Jarrod Langhans

John. you, Thank

at well positioned am thank to for XX-Q ahead of very And our wrapped have would to weaknesses few the and be team I overview, at and the support on control team The we they this had over company quarter and into all entire looking we many back our internal role. the first the to the I Before we up is I XX-K, business the continues CFO us. last and financial to some wanted Celsius the John as I remediating as progress weeks the we noted opportunities year. turn transitioned provided accelerate join that excited last

and am of the we our to we able less year. I our XX-K, be been with confident thus X end are controls will months has the that progress of remediate it pleased by since issuance than these far Although the

financial We are internal and resources and IT of ongoing operations as additional sales building our and well in teams teams out audit expansion. our support to as adding our growth

Turning to results. financial first our quarter

March XX, XXX% million the months increase year. in for million, or X was million quarter $XXX.X the from $XX.X $XX approximately revenue of first ended Our an XXXX prior

European an were was year $XXX.X quarter or of the of operations, growth the balance driven North XXX% from first $XX.X quarter. where material revenue XXXX million, due American the prior expected, generated revenues exchange the and The quarter were quarter timing. which foreign year slightly increase As to prior of for rates, our operations, sourcing below $X.X by revenues the primarily mainly to million million attributed raw

volume quarter. increase prior an $XXX,XXX Asian during increase attributable largely Other approximately million revenues, The in versus products to primary continue in which in factors with NCAP to from to increase increases revenues as to of SKU sales royalty North licensee, triple-digit revenue related was revenues XX% growth increases world as additions, include behind the in distribution quarter, $X and million, markets our an sales an in and strong the in presence increase year combined the prior cold approximately and opposed retailers, generated in American additional class were volume traditional such China year. The increase international the of from our of displays. optimization XXX% contributed product placement, in pricing. channels, total $X.X an

increases months profit in Gross This profit and margins gross or Sales Additionally, store million, marketing XXX% in to an distributor were in growth $XX.X is when gross of is months million in primarily profit quarter. across while for marketing for decrease in increase material year increased our of attributable was when profit March X Gross supply volume, $XX.X delivery $X.X expenses the mix of $XX raw XXXX. increase XXXX the for prior costs, million related to network ended million investment higher resulted quarter. which XX, to compared for XXX% XXX% quarter the to the increase expansion or the in prior The to in decreased an to increase prior customer continued March inflation $XX.X XXXX of first by XX.X% to X compared quarter activities, resulted million $XX.X the slightly chain. XX, XX.X% the dollars the the million. year mainly quarter. higher ended approximately our of revenues direct significant from margins from approximately and related

by to increased invest continue order in year employee Additionally, proper million prior growth. as support from the to to cost we approximately in area our this infrastructure the quarter have $X.X

broker remainder from as XXXX million $X.X well as the to this in expenses area the distribution in the amount and storage costs the of XXXX the for accounted increase Lastly, quarter of quarter.

of for XX% $X.X and was $X.X from first ended XXXX. a March percentage to the $X.X which of when an compared approximately This As XX% General XXXX. increase an first was and quarter marketing expenses million sales, million $XX.X the of X XX, other increase or months months sales X XXXX to year of quarter. the prior million, for administrative administrative or the quarter ended March million revenue XX, XXX% of primarily of in in XXXX expenses, increase the XX% attributable compared to increase drove were

mainly reserves debt legal costs, expenses and insurance audit expenses, administrative bad other The related in to increases are costs.

higher Additionally, reflect by an employee as increase $X.X costs investments this million to months XX.X% our our operational for and of made increase XXXX or being the March in teams. area commercial generated are being XX, volumes ended support X business of an

Management to performance, business quarter. business the it the to our into to to in translates motivate approximately $XXX,XXX promote the order very prior were when employees year ownership the and prior also when Depreciation attributes. compared at quarter. option minor on in in performance $XXX,XXX continued increases expense year amortization key important success which We them by deems over compared of saw stock providing a increase based

revenue, X compared of prior were the XX.X months of fully per million a X costs million percent $XXX,XXX on or Net based of for XX.X earnings outstanding million G&A of outstanding. March comparison sales our G&A diluted weighted XXXX $X.XX and based company March based able had $X.X on million and earnings growth. of a share the shares per March share months XXXX, months of in the In or total diluted average X% $X.XX a to we per of on a weighted year million as ended to the income XX, share XX% X diluted income share $X.XX XX, average average against per decreased for to outstanding the XXXX net ended shares As shares for XX, XX.X ended $X.XX leverage weighted based average a on approximately shares outstanding. diluted weighted fully of of XX.X was the

million we March working we approximately as million capital liquidity and million million on or December and $XXX.X $XX.X of to flows XX, activities X million $XXX.X of used assets XXXX, with of XXXX respectively which $XX.X net of provided operating respectively, $XX.X current XX, had X and activities approximately the no for million Focusing $X.X long-term cash Cash March XX, months by approximately and for optimal totaled in in debt. operating established the months our net compares cash demand ended by our XXXX, business. growth as as increases significant driven payable to ended by March XX, receivable improvements an part the XXXX. in million of $XX offset working by in stabilization service products capital timing the The net cash levels in improvements increase inventory was were our driven capital. accounts generation by have increase well of driven income accounts of as approximately of the Working in primarily and

strong from inventory together the expected growth our open operate Our our growing cash call questions. you. business remarks. to with current the concludes we the us operations throughout levels as now should position, you and sufficient provide for year. with deliver cash This operate Operator, to Thank results prepared continue may

Operator

first Our line from question Instructions] Kevin the Please proceed [Operator of with Grundy comes your you. Jefferies. with question. Thank

Kevin Grundy

up distribution businesses of the Maybe a question the congratulations consumer, moved the Monster and obviously very just then dovetails gives perhaps in geographies looks folks state that expansion you start news comment pricing your as a sort that or is on the given for a Are state is kind consumer? Great. well anything moment the of of any well data John, I this into Good result. that lost for on that from extremely as not good which really The some your and of on And or category. broader why from it’s that, around the anything sales on really improvement the concern you evening, of good nice we any state twofold category. afternoon still around picking perhaps with guys winded pause guess then distributors for you doing question, and don’t So consumer strong pricing, significant the viewed Thanks. good in be with any of of the Nielsen consumer? is that for category likelihood sort the given moves increasingly long the what fragile an sorry given with Monster to John. velocity.

John Fieldly

No, Kevin, question. great

it, a the to are there think at consumer, right going regards of the in customers. discussions like And all us, I happen you going taking any with concerned. what’s when look to on, very what’s with lot place of is we

is inflation that experiencing there like the So looks now. about are talk transitory. we recession all mean, It I not is

So is on that. everyone making adjustments

calls prior on April promotional We X. we next And effect quarters, over price hesitant put as pricing. started frontline a we did that in slowly take notices to out doing be have into increase, couple which X, which taking spoken of strategies. overall on frontline April will of about the We initiate but have implemented been

a recently. do pricing and We price, opportunities elasticity Their beverage of on. the we Celsius working category. and position the have been there are we in is with feel have in have news offset markets Due things our are most maintain a premium overall. felt of be costs those premium with a able happening position inflationary the seems done to that sentiment which the and will to we lot quite to especially mixed, the testing category consumer experiencing we that were the in strategies, that for what’s promotional to the we take So, some

watching further This additional forward closely. do a to category adjust will us promotional grow. basis. we give we continues overall, the see, leeway, are them we So, go can it strategies But on where

it. watching are We

in over We there of pricing continuing. based growth that is offering. Our product is not position, on we position a think ahead or We a good in where lot think is opportunity are given pretty are do we at. our luxury

Kevin Grundy

Got clarification X, you it. the that the Quick point the was April was Thanks. portfolio on that Jarrod, across amount amount? took the one pricing entire and and what of for

John Fieldly

to mean, it that we That It we Yes, has been portfolio percentage where we increase. – disclosed, the optimize, is disclose to haven’t percentage going are we are frontline frontline are disclose is price something on. I we the going actual – haven’t the not implemented a will of we this working did within we continue not but at pricing are – and we not point, to the took. take

inflationary the We amount a sufficient are we price protect of in taking are the order that in to experiencing environment. increases

Kevin Grundy

that’s Okay, news. A Jarrod for will good quick one I and then pass it on.

some whether would what this it’s early as Any I’ll there understanding Jarrod I think of you etcetera. management, terms observation opportunity, really be return And capital, optimization around just tools maybe is Thanks. comments on. in congrats and perhaps working SKU profitability, days, again, again, So, it early pass helpful? or see

Jarrod Langhans

Kevin. Thanks, Yes.

grown and opportunities I processes people company coming really X The last on are looking significantly and has so in over years, tackling. technology. the blocking think side the and early at really finance

that like to So, do to we have even is But perspective, from technology terms don’t help and doing great and of really want data as the there perspective in a teams what we analyzing has job models that. done. to team so analytic I and lot perspective obviously done at we things operations finance we out a efficient opportunity the than a well disruptive different a some to But sales from as can better be there building think of different The data, different is implement the business. think become tools processes that. a more I we and can from do effective

is probably and really, to hanging business support some So about we a perspective perspective. that from And low there can think fruit as that that’s from excel. the I just it’s G&A continue a grow team building

Kevin Grundy

guys. Thanks, good. Good Very luck.

John Fieldly

Thank you.

Operator

Kaumil of Gajrawala with Our next with Please question. the from your Credit proceed line question comes Suisse.

Kaumil Gajrawala

guys. Hi,

club to talk about club incremental So, other the could maybe you growth a bit kind first DSD from Are your delivering on question velocity if little and then of you all the of stores. And also what stores some versus clubs? channels? there like just looks

John Fieldly

the us. Kaumil. quite Yes, to surprising for In thank channel, you, club it’s been regards

QX. look quarters beverages told you see last Costco. If for of selling the delivered been Costco growth the that extreme the an we company. the over in there, at the And has one you success sec are top by just we energy several in

grow which to lie and is is direct the further some then DSD. think opportunities the of have also we leverage Club on. XXXX big in So point. opportunity business are platforms, their to ahead for Mainly, and the channel at this optimize scale, club especially working do Sam’s I online opportunity through and lots that But still with We leverage us BJ’s.

interesting great our you as didn’t it’s that which what’s all our channels, other at grow. channels, in the well great. to a look as it’s of channel, Amazon are affect When continuing it So, saw growth on we

Kaumil Gajrawala

like, Okay, already. great. your am noticed then out And I I was XX-Q

timing, fast. expense. year million last just like out, Maybe $X.X is related just Just bit? year linked something that So But I last I expected about this maybe up can $X.X with little just freight have is us model? am it to ask quarter. it as looks X look I quite different. that something than skew anything the this curious was only there given read grew, – I faster all is might how was if that’s little to too might the a Since much curious, orbit it’s million at a that and it you

John Fieldly

Jerrod. Yes, I’ll to it turn question. no, no, over great

Jarrod Langhans

look really, into during thing team and his over in the a from. we benefited something we so. because weeks We But it’s managing have quarter. took quarter freight same the did we the advantage opportunities and or that last that job Paul few the great X we a done noticed first have Yes, of

many able as kinds so Some and Costco the in of really terms customers significantly which other we much packaging orbit is pricing different are were example specific reduced instances, to relative that an at that it model of able that so mix, in where we use growth to created, we leverage were to that of was have also and freight was paying. what per load, local we

of good freight we So in see a a costs it or lower lot call perspective. from did come

costs. continue to will that will volume the can where Costco depending save and growth the production to where opportunity. of But sites packaging some the are like and the with to that to it going we the are where use in that warehousing We stores growth But we happening. and upon local freight us closer the utilize allow vary is

Kaumil Gajrawala

stores, whether And I Got inventory more just just to it. getting one, a on to aware there anything I it’s just it as of maybe anything we then there back – that, to is be get filling like one want kind of Thank relates club that should future sure quick make you. or timing comp… don’t

John Fieldly

of just quarters. revenue revenue at there continue recurring been a is couple we to Costco be standard The No. in have that now

took a that of fill-in. at in we look a in quarter. place the well, as But did the sales the was quarter, you reorder that so when receive Now,

a fill-in reorder. was it So, a and

we a think – had opportunity and So, learn to to lot we about there. Club going lies are Sam’s the I that

just phases. in are the We initial

through in once initial taken have when second we And what does has to new run get I enable better to go up a rate a us into maybe we that it look run like. quarter. time some levels or retailer, rate. continual historically, understanding think get ramped mind that the Keep you

the some anomaly of in velocity the a we Although fairly an just sales are turning Costco at good retailers, are seems awareness, to level. due to now, be new brand entering what of

lot learn the channel. to in a there club So,

a We quarter the the have end of of performance how with look we at Club. Sam’s will second think I the better will see –

Kaumil Gajrawala

Okay, great. Thank guys. you,

John Fieldly

you. Thank

Operator

comes question Van the line next Riley. Our Sinderen Please from of Jeff proceed question. with your B. with

Jeff Van Sinderen

my Hi add me everyone, let and congratulations.

there could and we the opportunity the Just what on of just we of wonder speak if are the What BJ’s, are should kind for? next look topic more the stores, club about as steps status you with BJ’s?

John Fieldly

is worked team the Yes. prepared amount mean of I hard. on really the mean is working And call you. team was I exciting remarks, some BJ’s joining the has in said all Jeff, accomplishments. like The quarter I the members around. new my team really currently, just great on and are it a really we Team thank great time.

But year. to definitely So, should throughout each confident here some opportunity, we stores we regards should every rollout pretty able in BJ’s this get this regionally. continuing and are feel now, get in But better the it year, to are – larger quarter. testing right reset to we be we within just will and we get hopefully a

I tests about Sam’s at But initial that’s confident positive. success and Club, think we pretty store been will the at their on buyers, be the decisions. feel to due have Costco But dependent all initial that. success

at. just premature a come where those will So, bit on in revenues little

the We pack of for optimize some we to business. try then we size better additional go looking And look at opportunity. are margins the lots also will forward, mix to at as that configurations

Jeff Van Sinderen

touch that, I your just can spring Okay. you of, a thinking And then follow-up about on take on just sort overall resets, just guess to maybe that.

John Fieldly

divisions. individuals week key Yes. this about as further delayed. – Pre-resets, we XX we said, got I were locations. have team actually were like we an resets, two some that expand. Circle accounts on spring They about as their and started have The They amazing well had X,XXX divisions K, team

to you will have resets, retailers lot has will our shortages been K So, some pushed to variety a shortages. the of on where labor today. a of weeks, several with – these of in out there delays be also delays of really reset to due further a lot some the of labor to these due Circle divisions in over they locations start next us continuing the out But see that roll

I working expansion are on reset. So, great But about talked think to we that. have we going Target. we earlier, are Walmart a

amazing. have lot we the winner anyone to additional X-Eleven from flavors was are launched. quarter mango us. And for see success. getting be product, a please we going We go great a QX we accounts to out interest to first fruit, are in launched going a it, It’s such If has and passion existing it’s tried try where of the in that not some new it just with the We coming flavors on.

a into I we head summer great it’s summer as beverage be going to So, think season.

well we So, positioned. are

DSD starting most a better get as alive come really team which the we importantly we portfolio get network them so and cold, to that further we have see placement are activates winning distribution, cold. it know You better when it’s

Jeff Van Sinderen

continued Okay. and Great. Thanks questions my taking success. for

John Fieldly

Thank you, Jeff.

Operator

comes with line Mark Our next of Astrachan question Stifel. Please your question. with from the proceed

Okay.

you hung might have up. think I

Ladenburg proceed Please line your question with the Jeffrey of from with question. Thalmann. next Our comes Cohen

Jeffrey Cohen

are how Jarrod, and John Hi, you?

John Fieldly

Jeff. Excellent,

Jeffrey Cohen

John, on launch to for and five, you the talk to were Can SKUs the call lemonade, regulars I looks question. anything like think sticks, either the out Arctic referring strawberry or bit then it now. specifically anticipated cadence you of balance And my about is year? And So, which XX little to the the heats? go a

John Fieldly

that’s am first lemonade, I there. probably a out question, energy that No, great strawberry being Yes. told the best tasting it’s drink

quarter behind is those So, performing And about for which a our extremely experiential rolling great great which summer expand to are summer. the convenience is We brings [ph], going Vibe is marketing – the it the one fun. is summer little second excited well. programs some the of that, Arctic our five out portfolio, we got really more And inviting bit channel a this be launch. in

think that’s profile. to a going be hit frozen berry flavor So, we a is great

are we about that. So, excited

about several the is you our when look quite on So, at And there we coming will to go retail three flavors months. have next sticks, interesting. over which the around

currently go revenue, variety although a are the a plus portion a in of our for lot smaller the of of we nationwide. which retailers heat go Walmart, launch seeing did and sticks, on We sticks. available And on represents the demand now is the

we great and to to the of job. opportunities category, the flavors is our bring portion a great doing So, the team on is And innovative innovation lots of team the, marketing go, a on continue core portfolio.

So, keep your eyes out.

great new flavors. some So,

Jeffrey Cohen

in and call which or perhaps, a business I year? specific anything out Nordics have are if million of to could you outside be a super territories That’s any this wonder call follow-up, territories and international plus the out, could China,

John Fieldly

a lot interest I that’s it top tier was some we from Look, in a of North in mean getting are America, distributors markets. great, other a,

as markets right are about growth, really preliminary that from we X and a further about those international drive expand I some the Tier to we we talk profitable now. at partners But of putting allow right together and distributors to structure as look to too us opportunities. talked think know, upon lot it’s getting distribution further you and interest expansion have

of health markets and in U.S. wellness in lot same Europe with in or a see great and trends the we Asia. So,

have we opportunity So, global here. a

Jeffrey Cohen

Super.

Okay. questions. Thanks for the Nice quarter. taking

John Fieldly

you. Thank

Operator

Astrachan with comes your of from Please question Mark proceed Our next Stifel. line question. the with

Mark Astrachan

Let’s guys Can you that again. try hear me?

John Fieldly

Mark? Actually,

Mark Astrachan

Perfect.

back So, look X. you go the into I could pricing, April if John, like to scanner wanted gone your since data on pricing It doesn’t go has up.

March offsets lag well and related you of in was the increase? we of might into were of quarter should for taking lieu that to to sort sort of as be some activity there selling there the is So, the just promotional that account, there any reduced pricing, ahead in that the pricing? is price Prior doing of

John Fieldly

there at prior year. are you it’s we off in the April seeing when period look think I what just that X, is Well, Yes. benchmarking

you during place. which So, adjustments seeing same timeframe, took are that pricing some

the there. really for frontline strategies in to, Get have Buy our Buy pricing, a data is impacted the to like have we not We of promotions likely, scanner third on right pricing be reduced One taken going regards retail, lot quarter. Juice, seen the The until around in

Xst. for is of frontline retailers But and our customers, mark did take have started you a our implemented. which take April as have we So, pricing, going it’s provide the time of process key notify we to we And some key to to that some it notice – set.

April that in we you did So, today. are starting start data Xst. of scanner see looking not at that a the as you But increase to are to price initiate

Mark Astrachan

Got it.

at to are XQ? point going we clear, data be what starting to So, that in in see the

John Fieldly

likely fourth seeing in and then start quarter that start starting the will continuing through third You quarter. to the data, the in

Mark Astrachan

Got it.

brand, the from point work maybe to use specifically you anything incremental and in Okay. traditional more Bull? there as have and of we shifting both to keep it if well some that category, incremental you in consumers how versus comments want Monster sourcing or terms energy Red as to consumption, much drink the And like of kind terms you incrementality can players to share your then your of is done just you on the performance, of Energy of

John Fieldly

Yes.

players. the I think And retailers the our we in our are are message key have cannibalizing that’s are other with great that’s Celsius. really seeing sales and the is we leading we providing opportunity not we of customers And what customers. key

over – that that And brought are we category contributed So, period. period you time what the of during look when in the we incremental. growth, at XX% growth about

are consumer into we energy a new category. in bringing So, the

the helping category are further expand. We

has XX-XX, male-female. been demo Our

incremental much But we slightly all of new to seeing. some are you it what some to cannibalization our that the the majority of is is really is very There data. category. So, seeing with are category

Mark Astrachan

helpful. Thanks That’s guys. Great.

John Fieldly

Thank you, Mark.

Operator

Our Group. comes proceed of Maxim line your Please next question Anthony question. with Vendetti with from the

Unidentified Analyst

store, you convenience the Hi, your for talk Jeremy that actually good me, This for Two that’s in quick afternoon. on Is Maybe questions greatest where the growth store? in a within growth you call do on know think is opportunity. you store, current little you expanding from expanding the line if growth there are you are see general? mentioned or and could that within said stores coming Anthony. stores, convenience I the you the I that so more,

John Fieldly

talked well at on drinks the great convenience are we is Jeremy, it. And extremely grocery, what well when But very club And calls. really The of at e-com, in doing, has mean I the next we opportunity back-dooring a performed really this channel, us. XX% look company you frontier Amazon, club the channel at where energy mass sold. on the are category, CVS. about the and of have the for Yes. variety look question. we you are before really Energy

So, we job, talked you about the has team great at K. a Track, X-Eleven, Circle look Race done at expansion

the just the you And convenience convenience chains are we means and Loves look with position well, no like of and in of the entered. to really Flying many doors number tapped are in the recently we scratching out at leading by today. So, getting capture just J in surface as channel, we the just

Celsius at number So, in offerings the leading the also lots but when leading competition. of the the channel, expanding opportunities, convenience has not only you in players look currently in the of of some versus ACV the expanding that offerings,

for So, in a we category ahead feel. we have sure long that runway

Unidentified Analyst

is price, margins, then And help a gross took into before that more costs. is bump on initiatives I this you shift is think have one those just more Great. room or you the have even and been you there took margins, that to baked in? in you any call, initiatives all mentioned the mentioned you you for is also to price, there lot And up of Okay. inflationary offset or gross

John Fieldly

well Yes. I we have now challenge it mean as the through. talked we have and these cans cycle as about company to imported the has

imported final all into news The U.S. we have is, are arriving. that the cans the is now the arrived So, that originally cans good

through using them them using this about or flushing it’s now up through – the So, them flowing and system. them through

in get the international put we to flowing from a end to somewhat cost which by of XXXX. cans cans margins QX. further we international a back to then good And pressure third more into can first fourth international and our and portion profit gross of of on our In and the the In good increase, somewhere quarter our by portion through So, expect that did we international QX, normalized those the can of use had the quarter, quarter percentage a of have will up was level goods. of mid-XXs anticipate mix. QX, we mix in

improve of current looking at further kind we environment. today what that’s the working on really are But are upon to based that. We

today. and in as With We most seeing variables out model, recent the are long prior down week, on delivery many the savings [ph], opportunities are And going alloy then been six there Jarrod local that’s so are aluminum rates. orbit to versus you up optimizing other analyzing the just alloy, haul mentioned, substantially. the seeing there come aluminum

that’s of that we seeing there of we now. movement kind are what But at. are looking lots So,

Unidentified Analyst

queue. Thanks a in Okay, the hop lot. will I great.

John Fieldly

you. Thank

Operator

comes proceed ROTH. Please question. McGowan question Our next from the your line with with Sean of

Sean McGowan

you. Thank

clarify he markets you When and something said First, on think John, ask could you see remarks. about quickly decline to continue opening in talking of if optimization. there, kind in you will I some were your Europe, to the I spoke you

not or there? turn and revenues to you clarify can should some around year-over-year, positive continuing we whether be see saying to see you or those are pressure expect So, negative

John Fieldly

strategies. we Yes. at week still had I over – last mean, going Florida team I think are the in looking we the

protein first we year. still looking we somewhere a for think with have quarter some point, revenue this XX% rate had XX% of to associated in the the are at delays growth I due At materials. a timing. challenges the shortages Europe with activity portfolio raw in railways had being of to of logistical There is the also of some shutdown and lot snacks also

impacted the have we first So things a quarter. that had lot of

watching for quarter. second are closely We the it

in have new than market. we launches and I anticipated. bit are see flavor And there – working And we opportunities We great is long think initially of will do we But a the programs be ahead. on. European a little slower lot been runway it’s

Sean McGowan

come strong to down down, current levels? high performance. unusually that sales to to you really I then two quickies? levels had that And sales? But end Thanks. said the the expect that, would would you can of further see the ratio coming was of quarter ask other outlook relative that What’s sales at if obviously, you inventory kind your from inventory I fourth and Okay. think expect for of

John Fieldly

at at, mean, million. reduce I you we we inventory about are $X and I look our by mean, Yes. you inventory right the when sitting did at levels now, Q, look

possession. committed into additional that we deposit from cans international cash then they had we the You cans because physically cans finalized purchase a the – inventory, move we when have shortages And we those international of the place. did took took to of

going XX is so through or I around million those cans, about are the on we cycling be which think to currently. that’s So right books,

think, us XX% levels, really service fill which on rate. to really a customers allowing is inventory good I

on. We have a new distribution coming

selling you are are season. entering And about supply beverage shortages starting We and to hear chains.

have there about. that talk been shortages that lot a is year So, when talked of a – we are again about talk lot our to suppliers, our of

in good we feel are position. we a So

We levels on raw. have good inventory

closely the as will We take very action and needed. are we watching markets

Sean McGowan

just load then a lot could And clog kind your your now the touch that expect saying, little to increase price you. thank then X% of in and Okay, customers them kick you of between to months, up out price Monster one do we up are on get that channel a on announced of a taking bit? competitors of about product X of the kind

John Fieldly

load-ins price the [indiscernible], do mean, I that a couple if you a months you this challenges you increase some make of that’s there. I in get see is assume do and I to business. X% there everyday but how in return anytime each want would get to a that could

think partners any and really We the don’t it’s we members, and distributors in team housing are be in good a position. war. our trajectory position. make is we sure to got there opportunity like really are we street some going will or ahead. We that So, distributors We a got said feel we slowdown great and lie I good our

Sean McGowan

Great. you. Thank

Operator

That to question-and-answer Fieldly brings over us session. call like for the hand back I’d our to end the remarks. John to closing of

John Fieldly

their behalf Thank company, you continued everyone like and support interest. you and the of thank for on just

wellness as results gaining our in considerable capitalize the energy taking today’s are place trends health we momentum Our products on demonstrate the and global and transformation category.

is position a position lifestyle global active appeal. with Our mass

and leveraging our our best practices. opportunities deploying upon building core business and are We

a navigate And We will continue position Have for We stay like you team. continued Stay day. category. strategy support a to the fit. today’s I believe be to rapidly and would that healthy, our of growing in confidence we their will challenges everyone. ahead our transformation all winning the to team we large, Thank portfolio consumers have investors and through energy want. able market and and and in a thrive additionally, great thank

Operator

gentlemen, Thank and teleconference. this conclude Ladies participation. your you does today’s for

this and wonderful may You disconnect have time at day. lines your a

Celsius (CELH) 11 May 222022 Q1 Earnings call transcript