Shares of Celsius Holdings (CELH) experienced a pullback today after the company's first-quarter earnings report fell short of revenue estimates. However, despite the revenue miss, Celsius managed to beat profit expectations with doubling earnings.

The primary reason for Celsius' revenue miss was attributed to an inventory adjustment made by its key distribution partner, PepsiCo. This adjustment had a distorting effect on the revenue growth figure, leading to confusion among investors.

Celsius Holdings, known for its fast-growing energy drink, has been an exciting success story in the consumer goods sector in recent years. The company has transitioned from a niche beverage favored by fitness enthusiasts to a mainstream soft drink available at popular chains like Dunkin' and Jersey Mike's.

In the first quarter, Celsius reported revenue growth of 37% amounting to $355.7 million, which fell short of the consensus estimate of $389.9 million. However, it is important to note that despite this shortfall, Celsius demonstrated strong underlying growth. The company highlighted a remarkable 72% growth in retail sales at chain stores in the U.S., indicating strong demand from consumers.

Celsius also achieved significant gross margin expansion, improving by 740 basis points to 51.2%. This improvement was primarily driven by Celsius' own inventory cuts, as well as lower freight and raw material costs. The company aims to maintain a gross margin percentage in the high 40s over the longer term.

On the bottom line, Celsius recorded GAAP earnings per share of $0.27, surpassing estimates of $0.19. The company's improving margins contributed to this positive result.

Looking ahead, Celsius Holdings does not provide specific guidance but remains optimistic about the upcoming peak summer season. The company expects to gain increased shelf space in key channels such as convenience stores and supermarkets. Celsius remains committed to driving growth in the energy drink market, expanding into new channels like food service, and entering international markets.

Although the stock experienced a downturn following the release of the first-quarter report, Celsius still holds a promising growth opportunity. Investors will be closely monitoring the company's performance as it continues to expand and adapt in the competitive beverage industry.

Disclaimer: Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius. The Motley Fool has a disclosure policy.