The Boston Beer Company, Inc. SAM posted fourth-quarter 2024 results, wherein the company reported a wider-than-expected loss per share. However, revenues surpassed the Zacks Consensus Estimates and increased from the year-ago period.
The craft brewer reported a fourth-quarter adjusted loss per share of $1.68, wider than the Zacks Consensus Estimate of a loss of $1.18 per share. The company reported a loss per share of $1.49 in the year-ago quarter.
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The Boston Beer Company, Inc. Price, Consensus and EPS Surprise
The Boston Beer Company, Inc. Price, Consensus and EPS Surprise
The Boston Beer Company, Inc. price-consensus-eps-surprise-chart | The Boston Beer Company, Inc. Quote
Net revenues of $402.3 million gained 2.2% from the prior-year quarter and beat the Zacks Consensus Estimate of $390 million. The increase is attributed to higher prices and lower returns, partly negated by soft volumes and elevated excise taxes. Excluding excise taxes, the top line grew 2.8% year over year to $429.2 million.
This Zacks Rank #3 (Hold) company’s shares have lost 15.4% compared with the industry’s 17.7% decline over the past three months.
Analyzing SAM’s Quarterly Performance
Boston Beer reported a 0.5% year-over-year drop in shipment volume to nearly 1.5 million barrels in the fourth quarter. Depletions were flat year over year. The decline in shipments resulted from the weak performance of Truly Hard Seltzer, partly offset by growth in the Twisted Tea, Sun Cruiser and Hard Mountain Dew brands.
Year-to-date depletions through the eight-week period ended Feb. 21, 2025, are likely to be flat year over year.
As of Dec. 28, 2024, distributor inventory averaged nearly four weeks on hand and was at a level for each of its brands compared with the five and one-half weeks on hand at the end of the preceding quarter.
The gross profit jumped 8.7% year over year to $160.7 million, whereas the gross margin expanded 230 basis points (bps) to 39.9% from 37.6% in the year-ago quarter. The gross margin benefited from higher revenues and procurement savings, which outweighed the impact of elevated inflationary costs. The company’s gross margin included $8.3 million of shortfall fees and $3.7 million of non-cash expenses related to third-party production pre-payments, impacting the gross margin negatively by 205 bps and 90 bps, respectively, in the fourth quarter.
Advertising, promotional and selling expenses climbed 8.5% in the fourth quarter to $139.5 million owing to higher brand and selling expenses, somewhat offset by lower freight to distributors from better efficiencies and lower volumes. Brand and selling costs rose $12.2 million on higher brand media investments, and salaries and benefits.
General and administrative expenses increased 9.1% year over year to $47.7 million due to higher professional fees and indirect taxes.
SAM’s Financial Snapshot
As of Dec. 28, 2024, Boston Beer had cash and cash equivalents of $211.8 million and total stockholders’ equity of $916.2 million. The company currently has $150 million in its line of credit, which, along with its cash position, will be sufficient to meet cash requirements.
The company repurchased Class A common stocks worth $239 million in 2024 and $29 million in 2025 through Feb. 21, 2025. As of Feb. 21, 2025, it had $398 million remaining under its current share repurchase authorization of $1.6 billion.
What to Expect From Boston Beer in 2024?
Boston Beer issued guidance for 2025. The company’s business is hurt by seasonal volume changes, with the first quarter and the fourth quarter being the weak volume quarters.
Depletions and shipments are expected in the band of down in low single-digits to up in low single digits for the year, hurt by the pace of improvement in the overall consumer landscape. The first-half 2025 shipments are likely to be at the high end of the full-year guided range, owing to the timing of planned demand and wholesaler inventory levels for a few brands and styles, mainly driven by Sun Cruiser, Hard Mountain Dew and Truly Unruly. The company estimates a price hike of 1-2% for 2025 to offset the commodity and inflationary impacts.
SAM anticipates a gross margin of 45-47% for 2025. The company's gross margin guidance includes the negative impacts of 60-80 bps from shortfall fees and 40-60 bps from non-cash expenses of third-party production pre-payments.
Advertising, promotional and selling expenses are likely to increase between $30 million and $50 million, the majority of which is likely to be in the first half of 2025. This does not include any change in freight expenses for the shipment of products to distributors. The company anticipates an effective tax rate of 29-30% for 2025. Capital spending is expected to be in the band of $90-$110 million for the year, mainly related to the company’s breweries to design capabilities and enhance efficiencies. It envisions GAAP earnings per share to be in the band of $8-$10.50 for 2025.
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