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Sep 27
Boston Beer Q3 2025 Earnings Report
Boston Beer reported its third quarter financial results for 2025.
Key Takeaways
Boston Beer Company experienced a challenging third quarter with declines in depletions and shipments, leading to an 11.2% decrease in net revenue. Despite these volume pressures, the company achieved a significant increase in gross margin due to procurement savings and improved brewery efficiencies. Net income increased, primarily due to a favorable comparison against a prior year brand impairment charge, though it declined when excluding this impact. The company remains optimistic about its Sun Cruiser brand and Angry Orchard's growth, continuing to invest in advertising and innovation.
Depletions decreased by 3% and shipments decreased by 13.7% in the third quarter.
Net revenue for the quarter was $537.5 million, an 11.2% decrease from the prior year.
Gross margin improved significantly to 50.8%, up 450 basis points year over year, driven by procurement savings and brewery efficiencies.
Net income increased to $46.2 million, largely due to the absence of a prior year non-cash brand impairment charge.
Boston Beer
Boston Beer
Forward Guidance
Boston Beer has updated its full-year 2025 financial guidance, raising its gross margin and EPS projections while increasing advertising investment. The company anticipates continued challenges in depletions and shipments but expects to benefit from ongoing supply chain initiatives and pricing strategies.
Positive Outlook
- Raised full-year 2025 gross margin guidance to 47% to 48% (from 46% to 47.3%).
- Raised full-year 2025 EPS guidance to $7.80 to $9.80 (from $6.72 to $9.54).
- Increased advertising, promotion, and selling expense year-over-year change guidance to $50 million to $60 million (from $30 million to $50 million), indicating continued investment in brands.
- Strong balance sheet with $250.5 million in cash and no debt, allowing for strategic investments and shareholder returns.
- Progress on multi-year supply chain initiatives is expected to continue delivering significant gross margin improvements.
Challenges Ahead
- Depletions and shipments percentage change guidance is down mid-single digit (previously down high single digit to down low single digit), indicating ongoing volume pressure.
- The fourth quarter is expected to be the lowest revenue quarter and the lowest absolute gross margin rate of the year due to seasonality.
- Shortfall fees and non-cash expense of third-party production pre-payments are estimated to negatively impact gross margin by 120 to 140 basis points for the full year.
- Tariff cost impact is estimated to be $9 million to $13 million for the full year, with a gross margin impact of 40 to 60 basis points and an EPS unfavorable impact of $0.60 to $0.80.
- Capital spending guidance has been reduced to $50 million to $70 million (from $70 million to $90 million), which could indicate a more cautious approach to expansion or efficiency projects.