I wrote here (Why I ignored my personal rule of no positions over 20% - #3 by HaikiliKona1) why binge-reading helped me build up my confidence level going into earnings of IOT.
I also binge-read a full year of earnings reports about CELH over the weekend and stumbled upon one inconsistency I would like to discuss. Maybe I am over-sensitive, but CELH is my largest current position, with roughly 29%. (Please don’t follow me, because being 48 years old, I have a high-risk tolerance and hopefully plenty of time to add regularly to my portfolio.)
Here is my thing:
John Fieldly, besides other things, is often referring to the importance of “gaining better placements in locations .”
“… And maybe more broadly, how do we think about where the product is going? Is it in existing energy coolers? Or are you moving into more dedicated performance, functional, helpful coolers ? …”
"… Also, I talked about the coolers that we’re investing in. We anticipate by the end of the year to have over 20,000 dedicated Celsius coolers. And so that’s a really great opportunity, and we’ve never had that before.
“I think the biggest opportunity we have , as well as in tracked channels is really gaining better placements in locations , more cold availability , more cooler placements and those type of executions. So maybe not a large increase in number of doors being at the 95% at the end of the quarter, but really the breadth in each retailer’s massive opportunity for us.”
“Great. Thanks for that color. And then just my last question real quick is if you guys are still providing these metrics, I was curious to know how many branded coolers there are as the end of the quarter. How many coolers you’re in total? And then just kind of where you guys are at in terms of penetrating Pepsis, I don’t, I believe it was 50,000 Pepsi owned energy coolers that you guys mentioned on one of the last calls. Just kind of want an update on there if you can provide it”
“…we still have a big presence and a big push for coolers and that’s a big opportunity for us gaining more cold placements. We see that opportunity now. The number of coolers we’re investing, we’ve made a decision not to disclose that specific number on a go forward basis, but we are investing in coolers, we’re investing in additional placements, off-shelf racks and those types. And we think there’s a lot of opportunities. In the past on the last call we said we were working towards and planning to half place by the end of the year of approximately 20,000 Celsius branded coolers, but that’s, we’re not going to provide any additional color on that .”
So, John Fieldly specifically mentioned the goal of having 20,000 Celsius branded coolers by the end of the year on two earnings calls in the first half of the year.
I couldn’t find any information in the Q2 2023 earnings call. However, I was surprised to read in the Q3 2023 earnings call transcript that the goal seemed to be lowered.
“… As you think about – you mentioned kind of the secondary placements. And I think part of that is leveraging your relationship with PepsiCo in terms of coolers, and part of it is your own effort to establish branded cooler locations. Where are you with respect to Celsius coolers this year? I know you had set a target earlier in the year. Are you on track to deliver that? And how much more opportunity is there on that front as you look ahead?”
"Yes. No, Jon, that’s a great question and something the teams are extremely focused on, not only within our core team members but also within the PepsiCo sales organization. So, our cooler initiative and program is part of our perfect stores, our strategy. So that’s a way we KPI the team as well. So, you’re going to get warm placement, cold placement, secondary placement and could include an end cap and then most – and then also cold placement upfront as well as the perfect store has a Celsius-branded cooler.
So, our goal was approximately around 15,000 to be placed this year . We’re working towards that. We’ll see if we’re going to be able to achieve it. We only have a few months left. The coolers, our biggest win we’re working on now is gaining chain-wide national authorization in front checkout coolers at major retailers, where we can really close 1,000, 2,000, 3,000 store locations. As an example, we just entered Public Stores with expanded distribution in the front-end cap – front checkout coolers. So that was a big win. Although not a Celsius-branded cooler, we do have great placement in those checkouts, and that’s going to allow us to continue to increase our availability, increase trial, and take advantage of those impulse purchases that we know Celsius can capitalize on.
It might be a mistake by John Fieldly, but binge-reading the reports, it stuck with me that the goal has been reduced to 15,000 coolers and that achieving that target wasn’t clear either.
CELH is my biggest position, and it might only be a mistake, but maybe it’s more than that. I am not sure what to make out of that.
What do you think?
Stay safe and healthy!