The Decline of Boston Beer Co.'s Stock

After-Hours Drop and Financial Performance

Boston Beer Co.’s stock (SAM) experienced a significant decline of 6% after hours on Thursday. This decline came as a blow to the brewer of Sam Adams beer. The company reported a net income of $45.3 million, or $3.70 per share, for the quarter, marking an increase from $27.3 million, or $2.21 per share, in the same period the previous year. It is important to note that this figure includes a non-cash brand impairment charge of 96 cents per share.

Additionally, there was a 0.9% decrease in revenue, which amounted to $601.6 million. These figures differ from the FactSet consensus, which projected an EPS of $4.08 and revenue of $594.0 million.

Depletions and Brand Performance

A key metric for the company, depletions, which measures the number of cases sold by distributors to retailers, reflected a decline of 6%. This decline can be attributed to decreases in the company’s Truly, Angry Orchard, Samuel Adams, and Dogfish Head brands. However, there were some positive outcomes as well, with increases in sales for its Twisted Tea and Hard Mountain Dew brands.

Updated Guidance

Boston Beer Co. has adjusted its earnings per share (EPS) guidance range, narrowing it down and lowering expectations. The revised EPS range is now projected to be between $6.04 and $8.04, compared to the previous guidance of $6.00 to $10.00. Additionally, depletions are expected to experience a decrease of 5% to 7%, compared to the earlier guidance indicating a decline of 2% to 8%.

Stock Performance

Despite the recent decline, Boston Beer Co.'s stock has seen a 11% gain so far this year. It is worth noting that in comparison, the S&P 500 (SPX) has experienced a 94% increase.