The Boston Beer Company (SAM) FY 2025 Conference September 04, 2025 03:15 PM ET Company ParticipantsSaree Boroditsky - SVP - Multi-IndustrialsC. James Koch - Chairman, Founder, Brewer & CEOSaree BoroditskyWe're going to get started. It's wonderful to have Chairman, Founder, Brewer and CEO, Jim Cook, joining us in Boston once again. Jim, as you know, and I say it every year, enjoying a beer with you on stage is the highlight of my September a wonderful So, way to end the thank you so much for being here agai ...

Financial Data and Key Metrics Changes - Depletions decreased by 1% compared to the first quarter of the previous year, while shipments increased by 5.3% [22][7] - Revenue for the quarter increased by 6.5% due to volume and price increases [23] - Gross margin for the first quarter was 48.3%, an increase of 460 basis points year over year [24] - Earnings per diluted share (EPS) was $2.16, more than double compared to the prior year [25] Business Line Data and Key Metrics Changes - Twisted Tea grew dollar sales by 1% in measured channels and maintained an over 86% share in the hard tea category [12] - Hard seltzer category sales declined by 5% in the first quarter, impacting Truly's performance [14] - Samuel Adams and Dogfish Head brands achieved flat depletions, with Dogfish Head's Grateful Dead Juicy Pale Ale launch being particularly successful [17] Market Data and Key Metrics Changes - The broader beer category is expected to remain relevant, but inflation and economic uncertainty are significant drivers of recent weakness [8] - The hard seltzer category continues to decline, with Truly facing challenges in maintaining market share [14][15] Company Strategy and Development Direction - The company is focusing on supporting category-leading brands, launching strong innovations, and expanding gross margins [8] - Increased advertising investment in 2025 aims to improve market share trends and ensure successful product launches [9] - The strategy includes nurturing core brands and pursuing a "fewer things better" approach to innovation [10] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment is challenging, with inflation and consumer confidence impacting performance [8][62] - Management remains confident in the strategies and team in place to deliver on 2025 plans and generate long-term sustainable growth [9] - The company expects to see improvements in depletions in the second half of the year, driven by increased brand support [84] Other Important Information - The company has repurchased $61 million in shares year to date [7] - Tariffs are expected to have an unfavorable cost impact of approximately $20 million to $30 million in 2025 [29] - The company ended the quarter with a cash balance of $152.5 million and an unused credit line of $150 million [34] Q&A Session Summary Question: Can you unpack the gross margin performance in the quarter? - Management indicated that stronger shipments contributed to the gross margin uplift, but the main driver was ongoing gross margin initiatives [38][39] Question: What is driving the cost pressure from tariffs? - Key drivers include the cost of aluminum and point of sale materials from countries with higher tariffs, particularly China [41][42] Question: Can you break out the contribution of Sun Cruiser and Truly Unruly to shipment volume? - Management typically does not break out shipments by product but confirmed that Sun Cruiser is meeting expectations and is margin accretive [48][49] Question: What gives confidence in Twisted Tea's growth after a slowdown? - Management noted the presence of smaller competitors and emphasized ongoing investments in advertising and innovation to regain market share [52][53] Question: How is the company addressing changes in consumer demand? - Management acknowledged the impact of macroeconomic trends and consumer behavior changes, including reduced sociability and health concerns [62] Question: Will depletions flip positive in the second half of the year? - Management expects depletions to improve, potentially flipping positive in the second quarter or second half of the year [84]