Celsius Holdings, Inc. (NASDAQ: CELH) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS JANUARY 21, 2025.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
The Class Period begins on February 29, 2024. On that day, before trading opened, Celsius issued an earnings release announcing its financial results for the fourth quarter ended December 31, 2023 (“4Q23”) and full year 2023. Specifically, Celsius highlighted record 4Q23 revenue, driven predominantly by North American revenue, which increased 97% to $333 million, up from $169 million the prior year. Celsius indicated that “North American revenue was driven by expansion in total distribution points and higher SKUs per location” and reported large increases in gross profit. Likewise, Celsius reported that gross profit as a percentage of revenue was 47.8% for 4Q23, up from 44.4% for the prior year fourth quarter, and attributed its 340 basis point improvement in gross profit margin to “efficiencies in raw material sourcing, product waste reduction, and benefits from improved leverage across promotional allowances.”

Notwithstanding these representations, on May 27, 2024, the price of Celsius stock declined materially as analysts and investors digested some of the latest retail store trends reported by Nielsen, a global data and analytics company. Specifically, Morgan Stanley noted that Celsius’ sales growth slowed sequentially in weekly retail data and also warned that Celsius faced difficult sales comparisons over the next several quarters as it rolled over the anniversary of its Distribution Agreement with PepsiCo, Inc. (“Pepsi”). Similarly, Stifel warned that sales could be dramatically diminished as Pepsi reduced the amount of Celsius inventory it held. On this news, the price of Celsius shares declined by $12.23 per share, or approximately 13%, from $95.15 on May 24, 2024, to close at $82.92 on May 28, 2024.

Then, on September 4, 2024, at a conference, Celsius’ CEO, John Fieldly, discussed the company’s Distribution Agreement with Pepsi, and revealed that Celsius’ sales to Pepsi had decreased by “roughly around $100 million to $120 million … from what Pepsi ordered last quarter.” Fieldly added that Celsius was “still seeing these inventory levels being reduced.” Additionally, it was noted that Celsius’ prior sales to Pepsi far outstripped market demand for Celsius products, and Pepsi was drawing down excess inventory from its warehouses. On this news, the price of Celsius shares declined by $4.25 per share, or approximately 12%, from $36.64 on September 3, 2024, to close at $32.39 on September 4, 2024.

Finally, on November 6, 2024, before the opening of trading, Celsius reported its third quarter 2024 (“3Q24”) results, disclosing the full unsustainable impact Pepsi’s Class Period product loading had had on the company’s business metrics and financial prospects. As a result, Celsius revealed a significant decline in its 3Q24 revenue and gross profit which was due to promotional allowances, incentives, and other billbacks as a percentage of gross revenue resulting from Pepsi’s drawdown.  When trading resumed November 6, 2024, the market price of Celsius common stock fell another $1.69 per share, or approximately 5%, on unusually high volume of more than 22.5 million shares trading, or more than 3.5 times the average daily volume over the preceding 10 trading days.

The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Celsius materially oversold inventory to Pepsi far in excess of demand, and faced a looming sales cliff during which Pepsi would significantly reduce its purchases of Celsius products; (2) as Pepsi drew down significant amounts of inventory overstock, Celsius’ sales would materially decline in future periods, hurting Celsius’ financial performance and outlook; (3) Celsius’ sales rate to Pepsi was unsustainable and created a misleading impression of Celsius’ financial performance and outlook; (4) as a result, Celsius’ business metrics and financial prospects were not as strong as indicated in Defendants’ Class Period statements; and (5) consequently, Defendants’ statements regarding Celsius’ outlook and expected financial performance were false and misleading at all relevant times.
 

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.