Near-Term Destocking and SKU Adjustments Create Pressure, but the 2027 Growth Reacceleration Thesis Remains Intact

Overview

This report summarizes Goldman Sachs’ virtual fireside chat held on August 7, 2026 with CELH Chairman and Chief Executive Officer John Fieldly and Chief Financial Officer Jarrod Langhans. The report focuses on explaining the reasons for the second-quarter earnings miss, assessing Celsius brand SKU optimization, PEP inventory adjustments, Alani Nu growth, channel expansion, and cost pressures, and analyzing the feasibility of growth reacceleration and margin expansion in 2027. The research concludes that near-term disruptions have not undermined the long-term growth thesis, and the current risk-reward remains favorable.

Core views

The weakness in the Celsius brand in the second quarter mainly stemmed from SKU rationalization, PEP inventory drawdown, increased promotional spending, shipment timing, softness in the club channel, and a temporary slowdown in innovation activity, rather than a structural brand deceleration. Management expects the third and fourth quarters to remain under pressure, but shelf resets, innovation launches, and easier comparisons are expected to gradually improve trends after the end of 2026. In 2027, the company will rely on multi-brand integration, core and 16 oz product innovation, enhanced sales execution, RGM, vertical integration, and international expansion to drive revenue and profit growth. Goldman Sachs also believes the current valuation reflects an excessive discount relative to beverage peers and MNST, and therefore reiterates its Buy rating.

Analysis framework

The report combines management interviews, company financial data, NIQ market share data, FactSet market data, retailer surveys, HundredX consumer feedback, and Goldman Sachs earnings forecasts. The valuation section uses both forward P/E and EV/EBITDA relative comparisons, and also breaks down the implied market capitalization of CELH and MNST by U.S. revenue share and energy drink market share to estimate valuation per market share point.

Methodology notes

• Fundamental AnalysisManagement Fireside Chat

  Assess the credibility of operating issues, execution plans, and future guidance through management communication.

  The report summarizes management’s comments on the causes of the second-quarter slowdown, SKU optimization, PEP synergies, innovation plans, margins, and international expansion, defining 2026 as a transition year and 2027 as a key year for growth recovery.

• Relative ValuationForward Valuation Multiple Comparison

  Compare CELH’s forward P/E discount or premium versus beverage peers and MNST.

  The report text notes that CELH trades at approximately 15.4x FY27E P/E, representing an approximately 26% discount to beverage peers and an approximately 55% discount to MNST, both below its average premium over the past three years.

• Segment ValuationImplied Market Capitalization per Unit of Market Share Analysis

  Compare valuation per share point by dividing implied U.S. business market capitalization by U.S. energy drink market share.

  Based on FY25 U.S. revenue share and NIQ market share as of July 25, 2026, the research estimates MNST’s U.S. business is worth about $1.6bn per share point, while CELH’s North America business is worth only about $0.3bn, corresponding to a discount of about 81.3%. This method assumes the same valuation multiple applies to each company’s domestic and international businesses, so it is a scenario analysis rather than a formal target price.

• Earnings ForecastRevenue, Margin, and EPS Forecast

  Forecast medium-term financial performance by combining volume, product mix, costs, and operating efficiency.

  The forecast incorporates innovation, channel expansion, RGM, raw material procurement, transportation network, vertical integration, and changes in diesel and aluminum costs, and expects revenue, EBITDA, and EPS growth in 2027 to improve versus 2026.

• Alternative Data AnalysisRetail Channel and Consumer Feedback Validation

  Use retailer surveys, scan data, and consumer intent indicators to cross-validate brand health.

  The report references retailer shelf and cooler configuration plans and uses HundredX consumer feedback data covering more than 80 industries and more than 3,000 brands to analyze purchase intent and brand trends.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CELH.US

  Primary research subject

  Strengths

  Owns two brands, Celsius and Alani Nu, each with annual sales exceeding $1bn, with the portfolio accounting for about one in every five cans of energy drinks consumed; has room for shelf expansion, product innovation, internationalization, and margin improvement.

  Weaknesses

  Recent excessive SKU rationalization, insufficient inventory transparency, slowing core brand growth, and elevated trade spending and supply chain costs.

  Comparison

  Trades at a significant forward valuation discount versus beverage peers and MNST, and the implied value per U.S. market share point is also materially lower.

  Risks

  If 2027 innovation and execution fail to restore growth, or if PEP inventory and channel synergies again deviate from expectations, the valuation discount may persist.

• MNST

  Core valuation comparable company

  Strengths

  Has a higher share of the U.S. energy drink market and receives a higher implied valuation per market share point.

  Weaknesses

  The report does not systematically analyze its operating weaknesses.

  Comparison

  MNST’s U.S. business has an implied market capitalization of about $1.6bn per market share point, versus about $0.3bn for CELH’s North America business.

  Risks

  Valuing CELH and MNST at the same unit share valuation may overlook differences in growth, margins, brand structure, and international business quality.

• PEP

  Strategic distribution and channel partner

  Strengths

  Has category management capabilities and a broad distribution network, which can help CELH expand shelf space, improve delivery efficiency, and execute multi-brand plans.

  Weaknesses

  The second-quarter inventory drawdown notification came late, limiting CELH’s visibility into and ability to respond to shipment impacts.

  Comparison

  Not a direct valuation comparable, but an important external driver of CELH’s operating performance and inventory cadence.

  Risks

  Inventory rebalancing, communication timing, or channel execution deviations may cause volatility between reported revenue and end-market sales.

Key data

• Market capitalization$6.9bnKey data on the report front page.
• Enterprise value$7.5bnKey data on the report front page.
• Three-month average daily trading value$298.6mnReflects stock trading liquidity.
• Celsius brand second-quarter revenue growth-11.7% year-over-yearBelow Goldman Sachs’ prior expectation of -6.5%; management stated that 13-week retail sales declined only about 2%.
• Impact of PEP inventory adjustmentapproximately $30mn to $35mnThe research estimates this was the main source of the Celsius brand’s second-quarter revenue decline.
• Celsius brand 2026 new shelf space+17%Most shelf resets were completed in July, with another new channel retailer expected to launch in the fourth quarter.
• Brand productivityTDP down about 7%, sales per TDP up about 16%Shows that sales productivity per distribution point improved after the SKU reduction.
• Amazon channel performance+17%The Celsius brand still achieved growth in channels where SKU rationalization was not implemented.
• Alani Nu second-quarter growthnet sales up about 21%, scanned retail sales up about 56%Excluding the impact of certain Canadian products and discontinued non-ready-to-drink products, management estimates net sales growth was about 39%.
• Third-quarter gross margin forecast48.3%Goldman Sachs forecast, close to the second quarter’s 48.1%, with diesel and aluminum costs still creating pressure.
• International revenue targetmore than 15% of total revenue over the next five yearsCompared with about 4% in FY25, and the company plans to introduce Alani Nu in selected international markets in 2027.
• FY27E P/Eapproximately 15.4x in the textThe text states this represents an approximately 26% discount to beverage peers and an approximately 55% discount to MNST; the front-page forecast table shows 14.3x, indicating differences in methodology across the original report.
• Valuation discount per unit of market shareapproximately 81.3%The implied discount for CELH’s North America business relative to MNST’s U.S. business per market share point.
• Zero-discount scenario valuationapproximately $130/shareA hypothetical scenario if each U.S. market share point of CELH were valued at parity with MNST, not a formal target price.
• Year-to-date stock performance-39%The report uses this to argue that the recent pullback provides a potential entry opportunity.

Impact & implications

In the near term, the lagged impact of SKU rationalization, PEP inventory rebalancing, weaker scan data, promotional spending, and fuel and aluminum costs may continue to weigh on third- and fourth-quarter performance, so the stock may remain volatile until operating trends turn positive. In the medium term, completion of SKU adjustments, increased shelf space, 2027 innovation launches, stronger PEP synergies, sales team expansion, and RGM implementation are expected to drive a recovery in core Celsius growth. Alani Nu’s high scanned sales growth, Rockstar integration, and international expansion provide additional growth sources. If the company can deliver revenue reacceleration and margin expansion, the current valuation discount versus MNST and beverage peers has room to narrow.

Risks

• The Celsius brand’s third-quarter performance may be similar to the second quarter, and improvement in the fourth quarter may not emerge until late in the quarter.
• SKU rationalization may have been too deep, with shelf space benefits materializing more slowly than the immediate revenue pressure from SKU cuts.
• PEP inventory drawdown, mixing center adjustments, and shipment timing may continue to cause revenue volatility.
• Rising diesel and aluminum costs are weighing on gross margin, with fuel costs reducing second-quarter gross margin by about 100 basis points.
• Differences between retail scan data and company reported revenue increase near-term forecasting difficulty.
• Alani Nu faces a higher year-over-year comparison base, a rising DSD mix, and uncertainty around the timing of new product distribution.
• If innovation, RGM, sales team expansion, and vertical integration execution fall short of expectations, the 2027 growth recovery may be delayed.
• The unit market share valuation analysis uses simplified assumptions, and approximately $130/share is only a zero-discount scenario rather than a formal target price.
• International expansion may bring risks related to brand localization, channel development, increased investment, and slower-than-expected profit realization.

What to watch

• Whether Celsius brand SKU optimization is completed as planned by the end of the third quarter of 2026, and whether the year-over-year comparison impact fades by the end of the fourth quarter.
• Changes in Celsius brand revenue, scanned sales, and sales per TDP in the third and fourth quarters.
• Core SKUs, 16 oz products, and Rockstar brand refresh plans to be announced at the NACS show in early October.
• Whether new products begin shipping in the fourth quarter of 2026 and are successfully placed on shelves during the first quarter of 2027 and spring shelf resets.
• Execution progress by PEP and CELH on inventory visibility, direct delivery, and mixing center traffic adjustments.
• Whether the gap between Alani Nu reported revenue growth and scanned sales growth narrows in 2027.
• Whether third-quarter gross margin can approach 48.3%, as well as fuel prices, aluminum costs, and hedging effects.
• Cost benefits from the second production line in North Carolina, direct procurement, and transportation network optimization.
• Incremental contribution from RGM and price-pack architecture in the second half of 2026 and in 2027.
• The increase in international revenue share and the specific plans for Alani Nu to enter the first batch of overseas markets in 2027.