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Boston Beer Q1 2025 Earnings Report
Boston Beer reported financial results for the first quarter ended March 29, 2025, showing increased net revenue and net income, despite a decrease in depletions.
Key Takeaways
The Boston Beer Company, Inc. reported a 6.5% increase in net revenue to $453.9 million and a 93.8% increase in net income to $24.4 million for the first quarter of 2025. Diluted EPS rose by 108% to $2.16. Depletions decreased by 1%, while shipments increased by 5.3%. Gross margin improved significantly to 48.3%.
Net revenue increased by 6.5% to $453.9 million, driven by volume increases and pricing.
Net income surged by 93.8% to $24.4 million, and diluted EPS increased by 108% to $2.16.
Gross margin improved by 460 basis points year over year to 48.3%, benefiting from price increases and procurement savings.
Depletions decreased by 1%, but shipments increased by 5.3% to approximately 1.7 million barrels, primarily due to Sun Cruiser, Hard Mountain Dew, and Twisted Tea brands.
Boston Beer
Boston Beer
Forward Guidance
The Company reiterates its full-year 2025 financial guidance, excluding the estimated impact of tariffs. Tariffs are expected to have an unfavorable cost impact of $20 to $30 million, or $1.25 to $1.90 per diluted share, and a negative gross margin impact of 50 to 100 basis points.
Positive Outlook
- The Company expects shipment trends to be above depletion trends in the second quarter.
- The Company expects to maintain a strong balance sheet to fund future cash requirements.
- The benefit of lapping CEO transition costs incurred in 2024 is expected to offset an increase in estimated incentive compensation for 2025.
- The Company's diversified portfolio of iconic brands and strong innovation pipeline are expected to support performance.
- The Company expects to continue increasing market share and expanding gross margin.
Challenges Ahead
- Depletions and shipments are projected to be down low single digit to up low single digit for the full year.
- The Company estimates that shortfall fees will negatively impact gross margin by 60 to 80 basis points.
- Non-cash expense of third-party production pre-payments will negatively impact gross margins by 40 to 60 basis points.
- The macroeconomic climate continues to be challenging.
- The Company's actual 2025 results could vary significantly from current projections due to changes in volume, supply chain performance, inflationary impacts, and tariffs.