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Jun 25, 2022
Boston Beer Q2 2022 Earnings Report
Reported financial results with revenue growth driven by pricing and strength in Twisted Tea shipments, but experienced a decline in depletions and shipments.
Key Takeaways
Boston Beer's second quarter results showed a 2.2% increase in net revenue, driven by pricing and Twisted Tea shipments, but depletions decreased by 7% and shipments declined by 1.1%. Net income decreased due to lower gross margins, partially offset by increased revenue and lower operating expenses. The company has reduced its full-year volume and earnings guidance due to a continuing decline in demand in the hard seltzer category.
Depletions decreased 7% and shipments declined 1.1% compared to the second quarter of 2021.
Net revenue increased 2.2% to $616.2 million compared to the second quarter of 2021.
Gross margin decreased to 43.1% from 45.7% in the second quarter of 2021.
Net income decreased to $53.3 million, or $4.31 per diluted share, from $59.2 million, or $4.75 per diluted share, in the second quarter of 2021.
Boston Beer
Boston Beer
Forward Guidance
The Company currently projects full-year 2022 Non-GAAP earnings per diluted share of between $6.00 and $11.00 a change from the previous estimate of between $11.00 and $16.00. The 2022 fiscal year includes 53 weeks compared to the 2021 fiscal year which included only 52 weeks.
Positive Outlook
- National price increases of between 3% and 5%.
- The Company continues to expect to cover higher commodity costs through pricing.
- The Company estimates the 53rd week will have a positive impact of between 1 and 1.5 percentage points on its depletions and shipments growth rates for the full year and between 4 and 6 percentage points on its depletions and shipments growth rates for the fourth quarter.
Challenges Ahead
- Depletions and shipments decrease of between 2% and 8% a change from the previous estimate of an increase of between 4% and 10%, the revision is driven by a change in expectations in the Company’s Truly hard seltzer business and the launch timing of Hard Mountain Dew in certain states moving into 2023.
- Gross margin of between 43% and 45% a change from the previous estimate of between 45% and 48% due to the impact of lower volume expectations and continuing supply chain impacts.
- Decreased investments in advertising, promotional and selling expenses of between $30 and $50 million, a change from our previous estimate of a decrease of between zero and $20 million, reflecting our reduced volume expectations.
- Non-GAAP effective tax rate of between 26% and 27%, excluding the impact of ASU 2016-09, a change from the previous estimate of approximately 26%.
- Estimated capital spending of between $110 million and $140 million a change from the previous estimate of between $140 million and $190 million.