Boston Beer reports a surprise profit as Twisted Tea shipments keep growing

MW Boston Beer reports a surprise profit as Twisted Tea shipments keep growing

By Tomi Kilgore

Stock soars, as depletions trend flat and as price increases boost gross margins

Shares of Boston Beer Co. saw a nice pop in after-hours trading Thursday, after the beer brewer reported a surprise first-quarter profit and revenue that rose well above forecasts, fueled by volume increases, pricing and lower returns.

The company, with brands including Samuel Adams, Twisted Tea Hard Iced Tea, Truly Hard Seltzer and Dogfish Head, also reiterated its full-year guidance for profit and volume growth.

Boston Beer stock $(SAM)$ shot up 9.3% after Thursday's close, after ending the regular session down 2.1%. Thursday's closing price of $287.27 was 4.5% above the April 16 five-year closing low of $274.92.

The company swung to net income of $12.6 million, or $1.04 a share, from a loss of $9 million, or 73 cents a share, in the same period a year ago. That beat the FactSet consensus for a per-share loss of 3 cents.

Revenue grew 3.9% to $452.2 million, well above the FactSet consensus of $412.5 million. Depletions, or what is sold to retailers by distributors, were flat, while shipment volume was up 0.9% to about 1.6 million barrels, as growth in Twisted Tea offset by declines in Truly Hard Seltzer and other brands.

Depletions had decreased in each quarter of 2023, and were down 6% for the full year. Meanwhile, Twisted Tea showed strong growth in each quarter of 2023, while Truly saw declines each quarter.

Gross margin improved by 5.7 percentage points to 43.7%, fueled by price increases.

For 2024, the company affirmed its outlook for earnings per share of $7 to $11, and for depletions and shipments percentage change in a range between a low-single-digits decline and a low-single-digits gain. The company also reiterated its guidance ranges for price increases of 1% to 2% and for gross margin of 43% to 45%.

The stock has dropped 16.9% year to date through Thursday, while the S&P 500 has gained 5.8%.

-Tomi Kilgore

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April 25, 2024 17:17 ET (21:17 GMT)

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