The Sam Adams parent is getting closer to returning to growth. As of 12:17 p.m. ET, the stock was up 6.1% on the news. The quarterly report was far from stellar, but considering the company's recent struggles, it was enough to please investors. Management said that demand improved during the quarter after a weak start in April, and the company also said gross margin increased 60 basis points to 46%. However, the bottom line still came up short, falling from $4.72 to $4.39, which was well below the consensus ...

Core Viewpoint - The Boston Beer Company, Inc. (SAM) reported disappointing second-quarter 2024 results, with both net sales and earnings missing the Zacks Consensus Estimate, primarily due to weak performance in the Truly Hard Seltzer segment [12][13]. Financial Performance - Earnings per share for the second quarter were $4.39, missing the Zacks Consensus Estimate of $4.99 and declining 7% year over year [1]. - Net revenues totaled $579.1 million, a decrease of 4% from the prior year and below the Zacks Consensus Estimate of $595 million [13]. - Shipment volume fell 6.4% year over year to 2.2 million barrels, while depletions volume decreased by 4% [15]. - Gross profit declined 2.8% year over year to $266.5 million, but gross margin improved by 60 basis points to 46% [16]. Cost Management - Advertising, promotional, and selling expenses decreased by 3.5% to $144.2 million, attributed to lower freight costs and reduced spending on brand media [4]. - General and administrative expenses rose by 7% year over year to $48 million, mainly due to increased salaries and benefits [17]. Inventory and Supply Chain - As of June 29, 2024, distributor inventories averaged three and a half weeks, below the targeted four to five weeks, impacting the company's ability to meet demand [3]. Share Repurchase and Guidance - The company repurchased $127 million in Class A common stocks year to date, with $140 million remaining under its current share repurchase authorization of $1.2 billion [5]. - Boston Beer reaffirmed its 2024 guidance, projecting GAAP earnings per share between $7.00 and $11.00, with depletions and shipments expected to decline by low single digits to zero [6].

Goldman Sachs analyst Bonnie Herzog reiterated a Sell rating, while reducing the price target from $210 to $230. RBC Capital Markets analyst Nik Modi maintained a Sector Perform rating, while cutting the price target from $332 to $318. Piper Sandler analyst Michael Lavery reaffirmed an Overweight rating, while slashing the price target from $344 to $325. RBC Capital Markets: "As expected, category pressures were too much to overcome in the near term and resulted in a more muted volume outlook for the year," ...

Boston Beer stock's recent dip (and today's earlier price action) brought it closer to its May 28 five-year low of $254.40. Year to date, SAM is currently down 18.8%. It's worth noting that the stock's 14-day relative strength index (RSI) of 16.3 sits firmly in "oversold" territory, which typically precedes a short-term bounce. The stock's typically quiet options pits are seeming some activity, with the most volume at the August 330 call. In fact, the eight most popular contracts so far are calls. Analysts ...

Boston Beer reported a 6.4% year-over-year drop in shipment volumes and revised volume guidance down for the full year. Net revenue fell 4% year over year due to lower shipment volumes. Rising production costs contributed to net income falling 9.8% to $52.3 million. Management revised down volume guidance for the full year. Overall, the quarter was a disappointing performance with some notable declines. Source: Boston Beer. YOY = Year over year. Boston Beer specializes in producing and selling alcoholic bev ...

Financial Data and Key Metrics Changes - Revenue for the quarter decreased by 4% due to lower volumes, partially offset by pricing and low returns [61] - The second quarter gross margin increased by 60 basis points to 46% from 45.4% in the prior year, benefiting from price increases and procurement savings [62] - Earnings per diluted share (EPS) was reported at $4.39, which was $0.32 lower than the second quarter of 2023 [53] Business Line Data and Key Metrics Changes - Twisted Tea grew by 15.1% in dollars and increased dollar share of FMBs by 1.6 share points, with shelf space increasing approximately 30% year-over-year [38] - Truly Hard Seltzer saw a volume decline of 22.8%, losing 2.1 share points, while lighter core packages within the Truly portfolio were down mid-single digits year-over-year [32] - The launch of Sun Cruiser has shown positive trends in depletions, distribution, and sales per point, indicating strong initial reception [39] Market Data and Key Metrics Changes - The overall Hard Seltzer category declined by 14.9% in volume, reflecting increased competition and consumer choices [32] - Distributor inventories as of June 29, 2024, averaged approximately three and a half weeks on hand, below the target of four to five weeks for the peak summer season [48] - Year-to-date depletions decreased by 2% compared to 2023, with expectations for a rebound in the second half of the year [63] Company Strategy and Development Direction - The company aims to improve end-to-end execution to unlock additional revenue and improve margins while nurturing core brands and developing margin-accretive innovations [29] - Focus will be on optimizing product development, manufacturing, and capital allocation to support a diversified portfolio [50] - The strategy includes a disciplined product roadmap and a commitment to invest in both core brands and new Beyond Beer categories [36] Management's Comments on Operating Environment and Future Outlook - Management noted that the first half of 2024 experienced challenges, but there is confidence in a recovery in the latter half of the year [59] - The company is optimistic about the growth potential of Twisted Tea and the new product Sun Cruiser, which is expected to attract new consumers [39] - Management acknowledged the need to regain market share and improve execution across all brands, particularly in the beer segment [99] Other Important Information - The company generated over $90 million in operating cash flow and repurchased $125 million worth of stock year-to-date [26] - Capital expenditures for 2024 are expected to range between $90 million and $110 million, primarily for brewery capabilities and efficiencies [57] - The company is committed to supporting brands with appropriate advertising investments, particularly in the second half of the year [46] Q&A Session Summary Question: What is the mid-term growth outlook for Twisted Tea? - Management expects another strong year of growth for Twisted Tea, with significant unrealized potential and plans for increased brand support and advertising [6] Question: How is the company addressing the decline in Hard Seltzer? - The company is focusing on gaining share and shelf space for lighter flavors and optimizing the flavor assortment to improve performance [32] Question: What are the expectations for Hard Mountain Dew? - Hard Mountain Dew is expected to benefit from expanded distribution and marketing support, with a more significant impact anticipated in 2025 [34] Question: How does the company plan to manage operating expenses? - The company plans to align internal costs with revenue while increasing marketing spend in the second half to support key launches [84] Question: What is the company's stance on being an independent public company? - Management reiterated the focus on growing the business as an independent company and emphasized the strength of its brand portfolio [137]

Over the last four quarters, the company has surpassed consensus EPS estimates two times. Boston Beer shares have lost about 21.3% since the beginning of the year versus the S&P 500's gain of 13.8%. Ahead of this earnings release, the estimate revisions trend for Boston Beer: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Despite revenue and depletions declines, the company achieved gross margin improvement and increased net income Q2 2024 Financial Metrics | Metric | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | | Depletions | -4% | N/A | | Shipments | -6.4% | N/A | | Net Revenue | $579.1 million | -4.0% | | Gross Margin | 46.0% | +60 bps | | Net Income | $52.3 million | -9.8% | | Diluted EPS | $4.39 | -7.0% | YTD 2024 Financial Metrics | Metric | YTD 2024 | Change (YoY) | | :--- | :--- | :--- | | Depletions | -2% | N/A | | Shipments | -3.4% | N/A | | Net Revenue | $1.005 billion | -0.8% | | Gross Margin | 45.0% | +260 bps | | Net Income | $64.9 million | +32.3% | | Diluted EPS | $5.41 | +35.9% | - The company repurchased **$127.0 million** of its Class A Common Stock from January 2, 2024, to July 19, 2024[2](index=2&type=chunk)[26](index=26&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management revised volume guidance but maintained EPS guidance, focusing on execution, innovation, and margin expansion - CEO Michael Spillane stated the company is revising volume guidance due to softer category performance and product launch timing, but maintaining EPS guidance supported by transformation efforts, focusing on optimizing execution and launching accretive innovation[3](index=3&type=chunk) - Chairman Jim Koch highlighted that gross margin improvement initiatives are working, with a year-to-date expansion of over **250 basis points** and strong cash flow, noting that while depletions were soft in April, they improved through the quarter[17](index=17&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Despite revenue declines, gross margins significantly improved in Q2 and YTD, driven by price increases and savings [Second Quarter 2024 Performance](index=2&type=section&id=Second%20Quarter%202024%20Performance) - Q2 shipment volume was approximately **2.2 million barrels**, a **6.4% decrease** from the prior year, mainly due to declines in Truly Hard Seltzer, partially offset by growth in Twisted Tea and the new Sun Cruiser brand[18](index=18&type=chunk) - Q2 gross margin increased to **46.0%** from **45.4%** year-over-year, benefiting from price increases and procurement savings, though negatively impacted by **$3.0 million** in shortfall fees (**50 bps**) and **$6.2 million** in non-cash expense of third-party production pre-payments (**110 bps**)[5](index=5&type=chunk)[21](index=21&type=chunk) - Advertising, promotional and selling expenses decreased by **$5.1 million** (**3.4%**) due to lower freight costs and reduced brand media spend[6](index=6&type=chunk) - General and administrative expenses rose by **$3.1 million** (**7.0%**) primarily due to inflation in salaries and benefits[22](index=22&type=chunk) - The effective tax rate for Q2 was **28.6%**, up from **27.5%** in the prior year, due to an increase in non-deductible stock compensation expense[7](index=7&type=chunk) [Year-to-Date 2024 Performance](index=3&type=section&id=Year-to-Date%202024%20Performance) - YTD shipment volume was approximately **3.8 million barrels**, a **3.4% decrease** from the prior year, reflecting similar brand trends as Q2[23](index=23&type=chunk) - YTD gross margin increased significantly by **260 basis points** to **45.0%**, driven by price increases, procurement savings, and lower returns and obsolescence costs[9](index=9&type=chunk)[17](index=17&type=chunk) - YTD advertising, promotional and selling expenses decreased by **$10.3 million** (**3.7%**) due to lower freight costs and reduced brand media spend[10](index=10&type=chunk) - YTD general and administrative expenses increased by **$9.8 million** (**11.1%**), primarily due to CEO transition costs and inflation[34](index=34&type=chunk) - YTD net income increased by **$15.9 million** to **$64.9 million**, primarily driven by higher gross margins that offset lower revenue[11](index=11&type=chunk) [Financial Position and Cash Flow](index=2&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company maintains a strong financial position with cash and no debt, generating operating cash flow and returning capital - The company ended the quarter with **$219.3 million** in cash and cash equivalents and no debt[16](index=16&type=chunk)[17](index=17&type=chunk) - Distributor inventory as of June 29, 2024, was below target at approximately **3.5 weeks** on hand, compared to a target of 4 to 5 weeks for the peak season[19](index=19&type=chunk) Cash Flow Activity (YTD 2024) | Cash Flow Activity (YTD 2024) | Amount (in thousands) | | :--- | :--- | | Net cash provided by operating activities | $91,116 | | Net cash used in investing activities | ($56,067) | | Net cash used in financing activities | ($114,245) | - The company repurchased **$127.0 million** in shares year-to-date through July 19, 2024, with approximately **$140 million** remaining on its share buyback authorization[26](index=26&type=chunk) [Full-Year 2024 Outlook](index=4&type=section&id=Full-Year%202024%20Outlook) The company revised full-year depletions and shipments guidance, while maintaining gross margin and EPS targets Full Year 2024 Guidance | Full Year 2024 Guidance | Current Guidance | Prior Guidance | | :--- | :--- | :--- | | Depletions & Shipments % Change | Down low single digit to zero | Down low single digit to up low single digit | | Price Increases | 1% to 2% | 1% to 2% | | Gross Margin | 43% to 45% | 43% to 45% | | GAAP EPS | $7.00 to $11.00 | $7.00 to $11.00 | | Capital Spending ($ million) | $90 to $110 | $90 to $110 | - Year-to-date depletions through the 29-week period ended July 20, 2024, are estimated to have decreased approximately **2%** from the comparable period in 2023[36](index=36&type=chunk) - For the full year 2024, the company estimates that shortfall fees and non-cash expenses from third-party production prepayments will negatively impact gross margin by a combined **135 to 185 basis points**[29](index=29&type=chunk) [Appended Financial Statements](index=6&type=section&id=Appended%20Financial%20Statements) The release provides unaudited condensed consolidated financial statements, detailing income, balance sheets, and cash flows [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows)

BOSTON, July 25, 2024 (GLOBE NEWSWIRE) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the second quarter ended June 29, 2024. Key results were: Second Quarter 2024 Summary: Depletions decreased 4% and shipments decreased 6.4% Net revenue of $579.1 million decreased 4.0% Gross margin of 46.0% up 60 basis points year over year Net income of $52.3 million, a decrease of $5.7 million or 9.8% Diluted income per share of $4.39 Year-to-date 2024 Summary: Depletions decreased 2% ...

Core Viewpoint - Boston Beer Company is expected to report second-quarter 2024 results on July 25, with anticipated bottom-line growth compared to the previous year [1] Earnings Estimates - The Zacks Consensus Estimate for earnings is $4.96 per share, indicating a growth of 5.1% from the year-ago quarter, although the estimate has declined by 2.4% in the past 30 days [2] - The consensus estimate for quarterly revenues is $595.2 million, suggesting a 1.4% decline from the previous year's reported figure [2] Volume and Revenue Trends - The second-quarter results are expected to reflect trends in volumes, pricing, and margin performance, with improved volumes and favorable pricing noted in the first quarter [3] - Continued momentum in the Twisted Tea brand and efforts to maintain core brand relevance are anticipated to drive robust volume trends in the second quarter [3][5] - The company is focused on nurturing its core brands and driving innovation through the Beyond Beer initiative, which is expected to contribute to category growth [4] Operational Performance - Boston Beer has benefited from strong price realization, procurement savings, and improved brewery performance, which are expected to bolster gross margin despite inflationary pressures [7] - However, gross margin may be impacted by shortfall fees and third-party production prepayments, which are likely to continue affecting growth in the second quarter [8] Category Challenges - The hard seltzer category slowdown is expected to weigh on the performance of the Truly brand, with anticipated volume declines throughout 2024 [9]