2023-04-27 16:47:41 ET
Boston Beer Company ( NYSE: SAM ) brewed a big earnings miss on Thursday as a sales slump for seltzer continues.
The Jamaica Plain-based brewer reported a $0.73 per share loss, more than twice the loss expected by analysts. Meanwhile, a 4.7% decline in sales year over year narrowly missed expectations as Truly Hard Seltzer, Angry Orchard, Samuel Adams, and Dogfish Head brands sales declined year over year.
Depletions for the first quarter decreased 6% and shipment volume fell 7.6% from the prior year. Gross margins contracted 210 basis points “primarily due to higher inventory obsolescence costs and higher brewery processing costs, partially offset by price increases.” Inventory obsolescence costs were tied mainly to the rebranding of theTruly Vodka Seltzer brand to Truly Vodka Soda.
"As we expected, our first quarter performance reflected strong growth in Twisted Tea, offset by continuing challenges in the hard seltzer category, and we are reiterating our 2023 depletion and shipment expectations,” CEO Dave Burwick said. “We also expect that our investments to fortify Truly, which are launching in the second quarter, will help us win in the marketplace over the long term.”
The company maintained a wide EPS guidance range between $6.00 and $10.00 against a $7.81 consensus expectation. Depletions are expected to drop between 2% and 8% while shipments fall by the same measure. Prices are anticipated to rise 1% to 3%.
Shares of Boston Beer Company ( SAM ) fell 3.33% in Thursday’s extended session.
Dig into the details of the print .
For further details see:
Boston Beer stock slips as falling seltzer sales skunk earnings results