Boston Beer Shares Slide On Q2 Earnings, Lowered FY22 Guidance

  • Boston Beer Company Inc SAM reported a second-quarter revenue increase of 2.2% year-over-year to $616.2 million, missing the consensus of $629.32 million. EPS decreased to $4.31, from $4.75 in 2Q21.
  • Q2 depletions decreased by 7%, and shipments were down 1.1% compared to 2Q21.
  • Gross margin was 43.1%, down by 260 bps, reflecting higher materials costs and higher returns and scrap, partially offset by price increases.
  • Operating income for the quarter declined by 10.9% Y/Y to $71.38 million, and margin contracted by 170 bps to 11.6%.
  • Advertising, promotional, and selling expenses decreased by $6.7 million or 4.2% from 2Q21.
  • SAM's net cash provided by operating activities year-to-date totaled $121.51 million, compared to $30.99 million a year ago.
  • "I continue to be optimistic about the long-term growth outlook for Boston Beer's diversified beverage portfolio, despite the greater than expected continuing decline in demand in the hard seltzer category that we have seen year to date," stated Chairman and Founder Jim Koch.
  • FY22 Outlook: Boston Beer projects full-year Non-GAAP EPS of $6 and $11.00 (prior expectation of $11 and $16) versus a consensus of $13.85.
  • It expects national price increases of between 3% and 5%; and a gross margin of 43% to 45%.
  • It says Depletions and shipments decrease between 2% and 8%, a change from the previous estimate of an increase of between 4% and 10%.
  • Price Action: SAM shares are trading lower by 8.38% at $308 during the post-market session on Thursday.
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