Key Takeaways Boston Beer reported a Q4 loss of $2.12 per share, narrower than estimates, as revenues fell 4.1%.SAM shipments dropped 7.5%, hurt by Twisted Tea and Truly, partly offset by Sun Cruiser growth.Boston Beer sees 2026 EPS of $8.50-$11, with tariffs to dent margins by $20-$30 million.The Boston Beer Company, Inc. (SAM) posted fourth-quarter 2025 results, wherein loss per share was narrower than the Zacks Consensus Estimate. Meanwhile, the top and bottom lines fell year over year.The leading craft ...

The Boston Beer Company (NYSE:SAM) Q4 2025 Earnings call February 24, 2026 05:00 PM ET Company ParticipantsBonnie Herzog - Managing DirectorDara Mohsenian - Managing DirectorDiego Reynoso - CFOJim Koch - Founder and ChairmanKaumil Gajrawala - Managing DirectorMichael Lavery - Managing DirectorMike Andrews - Associate General Counsel and Corporate SecretaryRobert Ottenstein - Managing DirectorConference Call ParticipantsFilippo Falorni - Equity Research AnalystNadine Sarwat - Equity Research AnalystPeter Gro ...

The Boston Beer Company (NYSE:SAM) Q4 2025 Earnings call February 24, 2026 05:00 PM ET Speaker9Please note that this conference is being recorded. I will now turn the conference over to Mike Andrews, Associate General Counsel and Corporate Secretary. Thank you, Mike. You may begin.Speaker7Thank you. Good afternoon, and welcome. This is Mike Andrews, Associate General Counsel and Corporate Secretary of The Boston Beer Company. I'm pleased to kick off our 2025 fourth quarter earnings call. Joining the call fr ...

Financial Data and Key Metrics Changes - In Q3 2025, depletions decreased by 3%, while shipments decreased by 14% compared to the previous year, primarily driven by declines in Twisted Tea, Truly Hard Seltzer, and Samuel Adams brands [8][24] - Revenue for the quarter decreased by 11.2% due to lower volumes, partially offset by increased pricing and favorable product mix [24] - The gross margin for Q3 was 50.8%, an increase of 450 basis points year-over-year, marking the highest level since 2018 [24][25] - Year-to-date, the company generated $11.82 in EPS, with gross margin at 49.7% [25] Business Line Data and Key Metrics Changes - Twisted Tea experienced a decline of 5% in dollar sales year-to-date in measured off-premise channels, losing share in a category that is down 3% [11][12] - Sun Cruiser has become the leading RTD spirits, tea, and lemonade brand in on-premise bars and restaurants, with significant growth in distribution and velocity [17][18] - Angry Orchard returned to growth, driven by increased investment and new sponsorships, with depletions growing in Q3 [22] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4% in volume, while the company’s depletions were down 3% [8][9] - The hard seltzer category declined by 4% in dollars in measured off-premise channels, as consumer preferences shift towards premium RTD spirits-based beverages [20] Company Strategy and Development Direction - The company is focused on innovation, advertising investment, and margin improvement, with a strong emphasis on the beyond beer category, which represents over 85% of its volume [6][7] - Plans include expanding Sun Cruiser and launching additional innovation brands, alongside local market activation programs [8][19] - The company aims to maintain share within its brand families and is investing in marketing to support Twisted Tea and Truly [55][56] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing challenges in the macroeconomic environment, impacting consumer demand, particularly among Hispanic consumers [6][12] - Despite current headwinds, the company sees long-term growth opportunities in the beyond beer category and plans to continue investing in its brands [7][19] - Management expressed confidence in the strategies and team in place to improve share trends and expand margins [23] Other Important Information - The company generated over $230 million in operating cash flow in the first nine months, allowing for significant share repurchases [10][30] - The company has narrowed its volume guidance range and raised its gross margin and EPS guidance for the full year [27][29] Q&A Session Summary Question: Clarification on promotional spend and pack sizes - Management confirmed that promotional spending will continue to support brands, particularly Twisted Tea, and mentioned the introduction of a four-pack of 16-ounce cans priced under $10 to attract consumers [34][38] Question: Gross margin performance and future targets - Management highlighted that strong gross margin performance was driven by procurement savings and brewery efficiencies, with a target of maintaining high 40s gross margin [44][46] Question: Top-line growth outlook and brand support - Management expressed optimism about Sun Cruiser's growth potential and emphasized the importance of maintaining share for Twisted Tea and Truly through increased brand support [52][55] Question: Impact of hemp beverages and Hispanic consumers - Management estimated that about 20% of Twisted Tea drinkers are Hispanic and noted that macroeconomic conditions and health concerns are significant factors affecting demand [72][73] Question: Fourth quarter earnings outlook - Management reiterated that the fourth quarter is typically the lowest revenue quarter, with expectations of continued volume challenges [78][79]

Financial Data and Key Metrics Changes - In Q3 2025, depletions decreased by 3%, while shipments decreased by 14% compared to the previous year, primarily due to declines in Twisted Tea, Truly Hard Seltzer, and Samuel Adams brands [8][24] - Revenue for the quarter decreased by 11.2% due to lower volumes, partially offset by increased pricing and favorable product mix [24] - The gross margin for Q3 was 50.8%, an increase of 450 basis points year-over-year, marking the highest level since 2018 [24][25] Business Line Data and Key Metrics Changes - Twisted Tea experienced a decline of 5% in dollar sales year-to-date in measured off-premise channels, losing share in a category that is down 3% [11][12] - Sun Cruiser has become the leading RTD spirits brand in on-premise channels and is now the fourth largest brand in the RTD spirits category, with significant growth in distribution [17][18] - Angry Orchard returned to growth in Q3, driven by increased investment and new sponsorships [22] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4% in volume, while the beyond beer category, which represents over 85% of the company's volume, is expected to grow as it attracts a younger and more diverse consumer base [6][7] - The hard seltzer category declined by 4% in dollars in measured off-premise channels, as consumer preferences shift towards premium RTD spirits-based beverages [20] Company Strategy and Development Direction - The company is focused on innovation, supporting its brand portfolio with advertising investments, and driving margin improvement [4][5] - Plans include expanding the Sun Cruiser brand and launching additional innovation brands in 2026 [8][19] - The company aims to maintain share within its brand families and is investing in marketing to support Twisted Tea and Truly [56] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing challenges in the macroeconomic environment, impacting consumer demand, particularly among Hispanic consumers [6][12] - Despite current headwinds, the company sees long-term growth opportunities in the beyond beer category and plans to continue investing in its brands [7][19] - Management expressed confidence in the strategies and team in place to improve share trends and expand margins [23] Other Important Information - The company generated over $230 million in operating cash flow in the first nine months of the year, allowing for brand investments and share repurchases [10] - The company has narrowed its volume guidance range and raised its gross margin and EPS guidance for the full year [27][29] Q&A Session Summary Question: Clarification on promotional spend and pack sizes - Management indicated that promotional spending will support Twisted Tea, including a new four-pack of 16-ounce cans priced under $10, and they are exploring smaller pack sizes [34][39] Question: Gross margin performance and future targets - Management highlighted that strong gross margin performance was driven by procurement savings and brewery efficiencies, with a target to maintain high 40s gross margin [44][46] Question: Top-line growth outlook - Management expressed optimism about Sun Cruiser's growth potential and plans to maintain share for other brands, despite challenges faced by Twisted Tea and Truly [53][56] Question: Impact of hemp beverages and Hispanic consumers - Management estimated that about 20% of Twisted Tea drinkers are Hispanic, and the overall macroeconomic situation and health concerns are significant factors affecting demand [72][73]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 decreased by 11.2% due to lower volumes, partially offset by increased pricing and favorable product mix [26] - Gross margin for Q3 2025 was 50.8%, an increase of 450 basis points year over year, marking the highest level since 2018 [26][27] - Year-to-date EPS reached $11.82, with guidance for full-year EPS revised to $7.80 to $9.80, up from $6.72 to $9.54 [28][32] Business Line Data and Key Metrics Changes - Depletions decreased by 3% in Q3 2025, with shipments down 13.7%, primarily driven by declines in Twisted Tea, Truly Hard Seltzer, and Samuel Adams [26][10] - Twisted Tea saw a year-to-date decline of 5% in dollar sales, while Angry Orchard returned to growth with increased depletions [12][24] - Sun Cruiser became the leading RTD spirits brand in on-premise channels, with significant growth in distribution and velocity [18][19] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4% in volume, while the beyond beer category, which represents over 85% of the company's volume, is expected to grow [6][10] - The hard seltzer category declined 4% in dollars in measured off-premise channels, as consumer preferences shift towards premium RTD spirits [21] - Hispanic consumer buying rates remain challenged, impacting brands like Twisted Tea, which has a significant portion of its drinker base from this demographic [12][13] Company Strategy and Development Direction - The company is focused on innovation, advertising investment, and margin improvement, with a strong emphasis on the beyond beer category [4][6] - Plans to expand Sun Cruiser and launch additional innovation brands in 2026 are underway, alongside increased advertising support [19][20] - The company aims to maintain share within its brand families and is investing in local market activation programs to support brand growth [8][17] Management's Comments on Operating Environment and Future Outlook - The management acknowledged a challenging macroeconomic environment affecting consumer demand, particularly among low to middle-income consumers [6][12] - Despite current headwinds, the company sees long-term growth opportunities in the beyond beer category and is committed to investing in its brands [7][10] - Management expressed confidence in the strategies and team in place to navigate the current environment and improve share trends [25] Other Important Information - The company generated over $230 million in operating cash flow in the first nine months of the year, allowing for brand investments and share repurchases [11] - The company has narrowed its volume guidance range for the year and raised its gross margin and EPS guidance, reflecting strong performance year-to-date [30][32] - The company ended the quarter with a cash balance of $250.5 million and an unused credit line of $150 million, providing flexibility for future investments [33] Q&A Session Summary Question: Clarification on promotional spend and timing - Management indicated that promotional spending will support Twisted Tea and that local marketing efforts will continue into next year [36][40] Question: Thoughts on smaller pack sizes - Management is exploring smaller pack sizes but believes that traditional sizes offer better value and margin [37][42] Question: Gross margin performance and future targets - Management expressed confidence in maintaining high gross margins and achieving targets through ongoing savings projects [46][50] Question: Top-line growth outlook - Management is optimistic about Sun Cruiser's growth potential and aims to maintain share across its brand portfolio [54][58] Question: Impact of hemp beverages and Hispanic consumers - Management noted that economic conditions and health concerns are significant factors affecting demand, with limited impact from hemp beverages [72][74]

Financial Data and Key Metrics Changes - Revenue for Q3 decreased by 11.2% due to lower volumes, partially offset by increased pricing and favorable product mix [32] - Gross margin for Q3 was 50.8%, an increase of 450 basis points year-over-year, marking the highest level since 2018 [33] - Year-to-date EPS reached $11.82, with guidance for full-year EPS revised to $7.80 to $9.80, up from $6.72 to $9.54 [38] Business Line Data and Key Metrics Changes - Depletions decreased by 3% in Q3, with shipments down 13.7%, primarily driven by declines in Twisted Tea, Truly Hard Seltzer, and Samuel Adams [32] - Sun Cruiser and Angry Orchard brands showed growth, with Sun Cruiser becoming the leading RTD spirits brand in on-premise channels [22][32] - Twisted Tea experienced a decline of 5% in dollar sales year-to-date, attributed to macroeconomic factors and competition from RTD spirits [15][16] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4% in volume, while the company's depletions were down 3% [12][32] - The hard seltzer category declined by 4% in dollars, with Truly remaining a top brand but underperforming [25] - The Hispanic consumer segment continues to face challenges, impacting demand across the industry [16][97] Company Strategy and Development Direction - The company is focused on innovation, brand support through advertising, and margin improvement initiatives [7][11] - Plans to expand Sun Cruiser and introduce new innovation brands in 2026, while continuing to support Twisted Tea with advertising and promotional efforts [20][25] - The company aims to maintain share in its brand families and capitalize on growth opportunities in the beyond beer category [71][80] Management's Comments on Operating Environment and Future Outlook - The current macroeconomic environment remains challenging, with consumers managing budgets tightly and moderation trends impacting demand [8][9] - Management remains optimistic about long-term growth opportunities in the beyond beer category, which represents over 85% of the company's volume [9][10] - The company expects to see improvements in the macroeconomic environment and brand performance in the long term [21][72] Other Important Information - The company generated over $230 million in operating cash flow in the first nine months, allowing for brand investments and share repurchases [14] - The company has narrowed its volume guidance range and raised gross margin and EPS guidance for the full year [36][38] - The company ended the quarter with a cash balance of $250.5 million and an unused credit line of $150 million [40] Q&A Session Summary Question: Clarification on promotional spend and local marketing - Management indicated that promotional spending will support Twisted Tea and that local marketing efforts will continue into next year [44][46] Question: Gross margin performance and future targets - Management expressed confidence in maintaining high gross margins due to ongoing savings projects and operational efficiencies [56][59] Question: Top line growth outlook and brand contributions - Management remains optimistic about Sun Cruiser's growth potential and aims to maintain share for Twisted Tea and Truly [70][76] Question: Impact of hemp beverages and Hispanic consumers - Management noted that the Hispanic consumer segment represents about 20% of Twisted Tea drinkers and highlighted macroeconomic factors as significant drivers of industry declines [97][98] Question: Fourth quarter earnings outlook - Management reiterated that Q4 is typically the lowest revenue quarter and explained the changes in production and marketing spend that contribute to this trend [104][108]

Core Insights - Sin stocks, representing companies in industries like alcohol, tobacco, cannabis, and gambling, are often viewed as unethical but have a history of delivering strong returns due to consistent demand [2][3][4] - These stocks are characterized by their defensive nature, maintaining stable demand even during economic downturns, which allows for strong pricing power and consistent cash flows [3][4] - Despite their potential for robust returns, sin stocks face challenges such as heavy regulation, negative public perception, and ethical concerns that may deter some investors [5][10] Industry Overview - Sin stocks have shown resilience during both economic expansions and contractions, making them appealing for investors willing to overlook ethical concerns [4] - The alcohol sector is experiencing a shift towards premium and craft offerings, while tobacco companies are adapting to declining cigarette use by investing in vaping products [8] - The cannabis industry is rapidly expanding in regions where legalization is increasing, presenting both growth opportunities and volatility [8][9] Company Analysis - **Diageo Plc (DEO)**: Focuses on market share growth through innovation and premiumization in the alcohol sector [6] - **Las Vegas Sands (LVS)**: Concentrates on property upgrades and strategic investments to drive growth in the gambling sector [6][18] - **Turning Point Brands (TPB)**: Building a growth story around established brands and next-generation products, with a focus on smoke-free alternatives [12][13][14] - **Boston Beer Company (SAM)**: Maintains a strong position in the U.S. craft beverage market, emphasizing innovation and operational efficiency to adapt to consumer preferences [15][16][17] - **MGM Resorts International (MGM)**: Holds a leading position in global gaming, enhancing its competitive edge through capital investments and expansion in digital gaming [18][19][20]

Core Insights - Boston Beer Company, Inc. (SAM) reported second-quarter 2025 results with earnings per share of $5.45, exceeding the Zacks Consensus Estimate of $4.37 and showing a 241% year-over-year improvement [3][9] - Net revenues reached $587.9 million, a 1.5% increase from the prior-year quarter, but fell short of the Zacks Consensus Estimate of $597 million [4] - Despite a 5% decline in depletions due to economic uncertainty and adverse weather, the company gained market share through a diversified brand portfolio and strong innovation [2][7] Financial Performance - Gross profit improved by 9.8% year over year to $292.5 million, with gross margin expanding by 380 basis points to 49.8% [11] - Advertising, promotional, and selling expenses rose by 10.7% to $15.5 million, while general and administrative expenses decreased by 4.7% to $2.3 million [12] - Year-to-date depletions are estimated to have declined by 3% year over year, with distributor inventory levels deemed appropriate [10] Market Position and Guidance - The company raised its gross margin guidance for 2025, now projecting a gross margin of 46-47.3% including tariffs, up from the previous estimate of 44% to 46.5% [17] - Capital spending expectations have been reduced to $70 to $90 million, reflecting a more disciplined investment approach [19] - The company anticipates depletions and shipments to decline in the high single digits to low single digits for 2025, with price increases remaining unchanged at 1% to 2% [16]

Financial Data and Key Metrics Changes - Depletions in the second quarter decreased by 5%, while shipments decreased by only 0.8% compared to the previous year, primarily driven by declines in the Truly Hard Seltzer and Sam Adams brands [30] - Revenue for the quarter increased by 1.5% due to increased pricing and favorable product mix, partially offset by lower volumes [31] - Gross margin for the second quarter was 49.8%, an increase of 380 basis points year over year, benefiting from improved brewery efficiencies and price increases [31] - Earnings per share (EPS) was reported at $5.45, a 24.1% increase compared to the prior year [32] Business Line Data and Key Metrics Changes - Twisted Tea held share in the overall FMB category, with dollar sales declining by 4% in measured channels last quarter [15] - Sun Cruiser has quickly grown to a 4% share of the RTD spirits category and continues to grow volumes week over week as distribution expands [20] - Dogfish Head grew depletions in the second quarter for the first time in many years, driven by the successful launch of Grateful Dead juicy pale ale [25] - Angry Orchard returned to growth in depletions, driven by increased investment and new sponsorships [26] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4%, while the company gained share [8] - The hard seltzer category declined by 7% in dollars in the second quarter as consumer preferences shift towards more premium RTD spirits [22] - The Hispanic consumer segment has been under pressure, impacting overall volume performance [14] Company Strategy and Development Direction - The company is focusing on long-term growth opportunities in the Beyond Beer category, which represents over 85% of its volume [7] - Continued investment in brand support and innovation is emphasized, particularly for Sun Cruiser and Twisted Tea [10][19] - The company is committed to a disciplined approach to investments, only pursuing clear opportunities [10] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a challenging macroeconomic environment, with factors such as economic uncertainty and poor weather negatively impacting consumer demand [6][7] - Despite near-term challenges, the management remains confident in the company's strategies and innovation pipeline to create long-term value for shareholders [11][28] - The company has updated its volume guidance to reflect a more dynamic industry environment, expecting volume to be down in the high single digits to low single digits for the year [33] Other Important Information - The company generated over $125 million in operating cash flow in the first half, enabling investments in brands and cash returns to shareholders [9] - The company ended the quarter with a cash balance of $212.4 million and an unused credit line of $150 million, providing flexibility for future investments [40] Q&A Session Summary Question: Update on business performance and Twisted Tea's decline - Management acknowledged a slow start to summer and noted that the industry is down 4-5%, but the company has gained volume and dollar share [46] - The decline in Twisted Tea is partially attributed to competition from the vodka tea category, but management believes the brand can recover as the market normalizes [49][51] Question: Clarification on updated guidance and depletion trends - Management explained that the updated guidance reflects softer depletion trends in Q2, leading to a wider range for future expectations [56][58] Question: Long-term growth potential for Sun Cruiser - Management expressed confidence in Sun Cruiser's growth potential, emphasizing a measured approach to its rollout and strong consumer reception [66][70] Question: Impact of tariffs on financial outlook - Management discussed the complexities of tariff impacts, noting adjustments based on supplier negotiations and changes in aluminum pricing [72][76] Question: Future gross margin potential - Management indicated that while current margins are strong, future performance will depend on tariff impacts and volume recovery [82][83] Question: Strategic actions in response to industry challenges - Management acknowledged the need for potential strategic actions in the industry due to ongoing structural headwinds [104]