Boston Beer Co. shares are heading to new highs Thursday afternoon, following a earnings report that showed buzzing hard seltzers are boosting company morale.
Boston SAM beer,
known for its Sam Adams-branded beers, reported profit of $ 65.6 million, or $ 5.26 per share, more than triple its total of $ 18.2 million in the same quarter a year ago . Net income for the company, which eliminates excise taxes, rose to $ 545.1 million, from $ 330.6 million a year ago.
Analysts on average expected earnings of $ 2.61 per share on sales of $ 477.3 million. Shares jumped more than 8% after-hours trading immediately after the results were released, gains that would push Boston Beer stock to record highs if it held Friday’s trading session. Shares hit a record intraday high of $ 1,319.34 in Thursday’s regular session, but fell back to close 0.7% lower at $ 1,246; the stock hit a record closing high of $ 1,294.93 on April 16.
Although known for its Sam Adams brands, as well as Dogfish Head and other beers, Boston Beer executives have credited a new category of beverage for its gains: hard seltzer. The company has jumped into a category that has become popular in recent years with the introduction of White Claw and other sparkling and fruity alcoholic beverages.
“The recently launched Truly Iced Tea hard seltzer has accelerated the growth of the Truly brand, which has more than doubled since last year,” Managing Director Dave Burwick said in the statement Thursday. “In the first quarter on measured offsite channels, the Truly brand topped the hard-seltzer category by almost 2 times, or 50 percentage points, resulting in a share increase of 6.5 percentage points. The Truly brand has now achieved a market share of over 28%, accounting for about 40% of all growth cases in the self-destruct category, twice as much as the second-largest growth brand. “
Boston Beer plans to launch another Truly-branded fruity drink in the second quarter, Truly Punch Hard Seltzer, while continuing to promote its Twisted Tea brand.
“Twisted Tea continues to generate double-digit volume growth rates that are significantly above the trends for 2020,” Burwick said in Thursday’s release. “In the first quarter, in the measured off-site channels, case growth in Twisted Tea branded products was almost three times that of its closest competitor and we believe Twisted Tea is on track to become the first flavored malt drink (FMB) of the year. finish.”
Executives also added $ 2 to their full-year adjusted earnings per share forecast, now forecasting $ 22 to $ 26 per share after earlier reporting $ 20 to $ 24 per share.
One of the concerns of executives is producing enough hard seltzer to meet supply, and how that might affect their margins. Burwick said Boston Beer will need to contract with third-party breweries to help them manufacture their products, which could reduce profits.
“As we plan to improve our margins in 2021, our gross margins and gross margin expectations will continue to be negatively impacted until our volume growth stabilizes,” said Burwick.