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Sep 25, 2021
Boston Beer Q3 2021 Earnings Report
Reported financial results with a net loss due to hard seltzer slowdown.
Key Takeaways
Boston Beer reported a net loss for Q3 2021, primarily due to costs associated with the slowdown in the hard seltzer category, despite an increase in net revenue. The company is addressing inventory issues and expects continued growth in the 'Beyond Beer' market.
Third quarter depletions increased 11% and shipments increased 11.2% compared to the prior year.
Third quarter net revenue increased 14.0% compared to the prior year, reaching $561.6 million.
The company experienced a third quarter net loss of $58.4 million, or $4.76 per diluted share.
The net loss was primarily due to direct and indirect volume adjustment costs of $133.0 million related to slower than anticipated hard seltzer growth.
Forward Guidance
The Company currently projects full year 2021 GAAP earnings per diluted share to be between $2.00 and $6.00, primarily as a result of slowing hard seltzer category growth and related inventory write-offs, contract termination fees, equipment impairments, absorption impacts, downtime charges, and increased sourcing and warehousing costs.
Positive Outlook
- Depletions and shipments increase of between 18% and 22%.
- National price increases of between 2% and 3%.
- Gross margin of between 40% and 42%.
- Increased investments in advertising, promotional and selling expenses of between $80 million and $100 million.
- Estimated capital spending of between $160 million and $200 million.
Challenges Ahead
- Slowing hard seltzer category growth.
- Related inventory write-offs.
- Contract termination fees.
- Equipment impairments, absorption impacts, downtime charges.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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