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Jun 27, 2020
Boston Beer Q2 2020 Earnings Report
Boston Beer's second quarter 2020 results were reported, featuring revenue growth and increased net income.
Key Takeaways
Boston Beer reported a strong second quarter with a 42% increase in net revenue to $452.1 million and a 116% increase in net income to $60.1 million, driven by shipment growth of 39.8%.
Depletions increased 46%, or 42% excluding the addition of Dogfish Head brands.
Shipments increased 39.8%, or 35.3% excluding the addition of Dogfish Head brands.
Gross margin was 46.4%, a decrease from 49.9% in the comparable period of 2019.
Full-year 2020 Non-GAAP earnings per diluted share is now estimated at between $11.70 and $12.70.
Boston Beer
Boston Beer
Forward Guidance
The Company currently projects full year 2020 earnings per diluted share to be between $11.70 and $12.70. Depletions and shipments percentage increase of between 27% and 35% of which between 1% and 2% of this growth is due to the addition of the Dogfish Head brands.
Positive Outlook
- Depletions and shipments percentage increase of between 27% and 35%
- National price increases of between 1% and 2%.
- Gross margin of between 46% and 48%.
- Increased investment in advertising, promotional and selling expenses of between $70 million and $80 million.
- Estimated capital spending of between $180 million and $200 million, which could be higher, if deemed necessary to meet future growth.
Challenges Ahead
- The Company’s actual 2020 earnings per share could vary significantly from the current projection.
- This does not include any changes in freight costs for the shipment of products to the Company’s distributors.
- Non-GAAP effective tax rate of approximately 26%, excluding the impact of ASU 2016-09.
- Because of the uncertainty and variability of the impact of ASU 2016-09, the Company is unable to provide, without unreasonable effort, a reconciliation of these Non-GAAP measures on a forward-looking basis.
- We have been experiencing out of stocks and we expect wholesaler inventories to remain very tight for the rest of the summer.