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Celsius Holdings (NASDAQ:CELH) just made a bold move, sending its stock soaring 29.5% at 11.26am, after announcing a $1.65 billion acquisition of Alani Nu. The dealstructured as a mix of cash and stockpositions Celsius as a dominant force in the functional beverage space, especially among female consumers, where Alani Nu has built strong brand loyalty. CEO John Fieldly sees this as a game-changer, leveraging Celsius' distribution muscle to accelerate Alani Nu's growth while strengthening Celsius' own foothold in the surging energy drink market.
On the financial front, Celsius' Q4 results were a mixed bag. Revenue landed at $332.2 million, dipping slightly from last year due to higher allowances and incentive programs, but international sales were a bright spot, climbing 39%. Gross margins improved to 50.2%, thanks to lower freight and material costs, but net income took a hit, dropping to -$18.9 millionlargely due to legal expenses and restructuring. Adjusted EPS of $0.14 came in just below expectations, but the market shrugged it off, focusing on Celsius' expanding market share and long-term growth prospects.
Investors are betting that this acquisition will supercharge Celsius' momentum. The company has already gained serious traction, with retail sales jumping 22% in 2024 and category share hitting 11.8%. Now, with the Alani Nu deal expected to close in Q2 2025, Celsius is poised to widen its competitive edge at a time when demand for functional beverages is exploding. If management executes well, this could be the start of another major growth chapter for the brand.
This article first appeared on GuruFocus.