Boston Beer Q4 2020 Earnings Report
Key Takeaways
Boston Beer reported a strong fourth quarter with a 53.0% increase in net revenue to $460.9 million and a 135.7% increase in net income to $32.8 million, or $2.64 per diluted share. The growth was primarily driven by a 54.0% increase in shipments.
Depletions increased 26% from the comparable period in the prior year.
Shipments increased 54.0% from the comparable period in the prior year, leading to higher distributor inventory.
Gross margin was 46.9%, a decrease from 47.4% in the comparable period in 2019, due to higher processing costs at third-party breweries.
Advertising, promotional, and selling expenses increased by $48.1 million, or 51.6%, over the comparable period in 2019.
Boston Beer
Boston Beer
Forward Guidance
The Company currently projects full year 2021 Non-GAAP earnings per diluted share of between $20.00 and $24.00 and depletions and shipments percentage increase between 35% and 45%.
Positive Outlook
- Depletions and shipments percentage increase between 35% and 45%.
- National price increases of between 1% and 2%.
- Estimated capital spending of between $300 million and $400 million, which could be significantly higher, if deemed necessary to meet future growth.
- Truly and Twisted Tea brands are expected to continue driving growth.
- Operating expenses growth rate is expected to be below top line growth rate, delivering leverage to operating income.
Challenges Ahead
- Gross margin of between 45% and 47%, a decrease from the previously communicated estimate of between 46% and 48%.
- Increased investments in advertising, promotional and selling expenses of between $120 million and $140 million.
- Non-GAAP effective tax rate of approximately 26.5%, excluding the impact of ASU 2016-09.
- Expectations will continue to be impacted negatively until the volume growth stabilizes.
- There is increased competitive activity in the hard seltzer category.