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Sam Adams' Earnings Were 'Brewtal' And 'Falling Flat'

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Sam Adams' Earnings Were 'Brewtal' And  'Falling Flat'

Are you ready for some beer-stock related puns?

According to Gadfly's Tara Lachapelle, Boston Beer Company Inc (NYSE: SAM), the parent company behind the Sam Adams brand of beer, reported its third-quarter earnings results on Thursday, which were "brewtal" as its revenue is "falling flat."

The company reported that it earned $2.48 per share in the third quarter on revenue of $253.4 million. Wall Street analysts were expecting the company to earn $2.60 per share on revenue of $278.91 million.

Taking a deeper look at the top and bottom line show an alarming trend is brewing. For the first time in more than 10 years, Boston Beer Company's revenue is actually falling and doing so at a faster rate than analysts expected.

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Lachapelle continued that competition within the craft beer market is tougher than it has ever been. Meanwhile, consumers are shifting not only toward healthier food options but are looking for similar options when it comes to alcohol.

Boston Beer Company's stock is now trading at a valuation of around $1.80 billion, down from its peak of more than $4 billion in January 2015. Naturally, this is leading some to suggest that an acquirer can take over the company at a more attractive price.

Lachapelle suggested that the company's founder, chairman and controlling shareholder Jim Koch may be open to the concept of selling his baby. Constellation Brands, Inc. (NYSE: STZ) is one company that could be interested in a purchase of the Sam Adams brand, which would fit in perfectly with its "premiumization" strategy when it comes to beer.

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Latest Ratings for SAM

DateFirmActionFromTo
Oct 2019MaintainsNeutral
Oct 2019MaintainsHold
Oct 2019MaintainsNeutral

View More Analyst Ratings for SAM
View the Latest Analyst Ratings

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