Boston Beer reported lower second-quarter profit as revenue declined due to lower depletions and shipments.
U.S.-listed shares of the company fell 4% in after-hours trading.
The beverage maker on Thursday posted a profit of $52.3 million, or $4.39 a share, for the quarter ended June 29, compared with $58 million, or $4.72 a share, a year earlier.
Revenue fell to $579.1 million from $603.3 million last year, compared to analyst expectations of $597.1 million. Boston Beer said this drop came from lower volume, partially offset by higher prices and lower returns.
Boston Beer said depletions, a key metric that tracks sales by distributors to retailers and is considered a proxy for demand, fell 4% year over year as shipment volume fell 6.4%. The company said the decline was primarily due to weakness in the Truly Hard Seltzer brand that was only partly offset by growth in the Twisted Tea brand and the new Sun Cruiser brand.
The company cut its guidance for depletions and shipments to down low single digit to zero from down low single digit to up low single digit.
Chair Jim Koch said the company's initiatives to improve gross margin are continuing to take hold, pointing to a 250-basis point expansion in gross margin. He said that depletions started soft in April but improved over the quarter.
Koch added that the company plans to use its strong balance sheet to invest in its brands and return cash to shareholders.
