Celsius Holdings stock surges on record demand, Pepsi partnership
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Celsius Holdings (NASDAQ:CELH) shares rose sharply on Wednesday after the company posted triple-digit increases in gross profits and revenue.
The Florida-based beverage company notched a 110% increase in gross profits from the prior year to $59.3M, while revenue rose 136.7% in the same period to $154.02M. CEO John Fieldly indicated that revenue is only set to increase as record levels of purchases progressed through the quarter and into July. While margins fell sequentially, the company expects this metric to improve in coming quarters. 
âWe reiterate and our expected expectations of sequential gross margin improvements throughout 2022 with fourth quarter gross profit margin is expected to be in the mid-40s,â Fieldly told analysts on Tuesday evening. âWith the exception of higher cost with international cans, a majority of our other COGS increases have been offset by scale efficiencies to raw materials, production, full truck shipments and reducing the miles on cases as well as optimizing our 6-orbit warehouse expansion, which we announced last fall.â
He added that the companyâs new partnership with PepsiCo (PEP) should begin to bear fruit in coming quarters, easing supply chain issues and cushioning the companyâs cash position.
âWith the latest injection of funds from our PepsiCo transaction, we have sufficient firepower to take our business to the next level as we transition into the PepsiCo distribution network across the U.S. and then internationally,â Fieldly said.
The picture of the company presented in the earnings release encouraged already-bullish analysts to raise their expectations on Wednesday.
âWhile acknowledging the risks associated with some degree of inevitable, temporary disruption of distribution, we expect CELH to continue outperforming the competition and point to a long runway for growth ahead that likely will be enhanced by the PepsiCo distribution partnership,â B. Riley Securities analyst Jeff van Sinderen advised clients after the print. 
He raised his price target to $130 from a prior $112, reiterating a âBuyâ rating on shares. 
Shares of the energy drink maker rose 9.36% in mid-day trading.
Read the earnings call transcript.