Shares of Boston Beer (SAM -18.33%) were moving Wednesday after the maker of Sam Adams beer, Truly tough seltzer, and other alcohols published frustrating fourth-quarter outcomes, continuing a current pattern.
Boston Beer goes sour
Revenue continued to relocate the incorrect instructions with sales falling 12% for the financial quarter, or 3.1% on a 13-week equivalent basis, to $393.7 million, which was well listed below price quotes at $413.8 million. (The business’s financial 2022 Q4 consisted of an additional week, making complex direct contrasts.) Depletions, a proxy for end-consumer need based upon system sales from suppliers to merchants, were down 9% year over year, or 1% on a 13-week equivalent basis.
Management pointed out ongoing decreases in sales of Truly tough seltzer for the dip in profits, though those were balanced out by increasing sales of Twisted Tea, Sam Adams non-alcoholic drinks, and Dogfish Head canned mixed drinks.
Gross margin increased from 37% to 37.6% due to rate boosts and procurement cost savings, even as the business continues to deal with headwinds from legal shortages in third-party production capability arrangements.
On the bottom line, the business reported a loss of $1.49 per share in the seasonally weak quarter, which was even worse than both the agreement quote for a loss of $0.25 per share and its loss of $0.93 per share in the prior-year quarter.
“As we look forward into 2024, we believe we have the right strategies in place to steadily improve our revenue and margin performance while continuing to invest in our brands and industry-leading salesforce,” stated Chairman Jim Koch in the profits release.
What’s next for Boston Beer
The business stated that year to date, exhaustions are down 2%, and looking ahead, it anticipates exhaustions and deliveries to be around flat for the year. It’s likewise requiring rate boosts of 1% to 2%, suggesting a small boost in profits, and it’s directing for usually accepted accounting concepts (GAAP) profits per share of $7 to $11. That would be a substantial enhancement from the $6.21 per share it reported in 2023, however still listed below the $11.39 that the typical expert projection required.
At that anticipated revenue level, Boston Beer stock still looks pricey. Its present appraisal suggests a healing that has yet to emerge.
Jeremy Bowman has no position in any of the stocks discussed. The Motley Fool has positions in and suggests Boston Beer. The Motley Fool has a disclosure policy.
