Celsius Earnings: Weak Demand Pressured Results, but Alani Nu Acquisition Takes Center Stage

No-moat Celsius reported disappointing fourth-quarter results, with $332 million in sales and $0.14 in adjusted EPS, falling well short of our $384 million and $0.31 estimates, respectively. We think the weak demand backdrop in the energy drink category, coupled with increased promotional and marketing spending, weighed on the earnings, though new flavors and wider distribution of its Essentials line may help improve trends in the coming quarters.