Celsius Holdings, Inc. ( CELH ) shares are trading lower on Wednesday.

The company’s earnings per share in the third quarter was $0.00, missing the street view of $0.04. Quarterly sales of $265.70 million (down 31%) missed the analyst consensus of $267.11 million.

For the three months ended Sept. 30, gross profit decreased by 37% to $122.2 million. Gross profit margin decreased by 440 points to 46.0%.

The decrease in gross profit was due to promotional allowances, incentives, and other billbacks as a percentage of gross revenue.

“Pronounced supply chain optimization by our largest distributor, which we believe has largely stabilized, had an outsized and adverse impact on our operating results during an otherwise solid quarter,” said John Fieldly, Chairman and CEO of Celsius Holdings ( CELH ). 

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Sales to Costco Wholesale in the third quarter increased 15%; however, sales to Sam’s club and BJs were negatively affected due to the timing of promotions and innovation loading in the year-ago period. 

Celsius sales to Amazon.com increased 21% year over year to approximately $27.0 million for the quarter. Approximately 12.3% of Celsius’ total U.S. sales to PepsiCo in the third quarter was to the food service channel.

The company exited the quarter with cash and equivalents worth $903.748 million. Inventories-net as of quarter end was $197.572 million.

“Our strong balance sheet enabled us to acquire a long-time Celsius co-packer, Big Beverages, which we believe will unlock innovation and other supply chain efficiencies,” said Jarrod Langhans, Chief Financial Officer of Celsius Holdings ( CELH ).

In November, Celsius acquired Big Beverages Contract Manufacturing, providing it with a 170,000-square-foot, modern manufacturing and warehouse facility.

Price Action: CELH shares are trading lower by 6.4% to $29.70 premarket at last check Wednesday.

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