Boston Beer Sees Strong Second Quarter, But Lowers Volume And Profit OutlookAugust 3, 2011
Boston Beer Co. achieved record depletions in the second quarter of 2011 but lowered its volume and profit expectations for its full year, citing a less robust consumer environment and increasing energy costs. The Samuel Adams brand-owner recorded a net sales increase of 3.3% to $134 million in the second quarter, with net profits—helped by a one-off gain of $20.5 million from a cash settlement on a 2008 product recall—jumping 71% to $28 million. (Without that one-off gain, profits would have fallen by $1 million, or 6%, year on year, as Boston Beer ramped up its advertising, promotional and selling spend.)
For the first half of 2011, Boston Beer’s net sales rose 5.6% to $236 million, with net profits up 42% to $32 million. With the economy slowing of late, the company has lowered its full-year depletions forecast from 9% to 7% and its earnings per diluted share projection to between $3.20 and $3.60 from between $3.45 to $3.95.
Boston Beer chairman Jim Koch recently told Shanken News Daily that volume growth has been coming not only from flagship Samuel Adams Boston Lager this year, but increasingly from extensions like its Sam Adams Seasonals, as well as Twisted Tea. “Each of our seasonals is the number-one seasonal in its calendar slot,” Koch said, adding that Summer Ale is the largest of Boston Beer’s seasonal offerings. “The entire seasonal category—which we started 23 years ago—has finally come into its own. In addition, Latitude 48 IPA is already one of the top new beers of 2011.”Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.