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Dec 26, 2020
Boston Beer Q4 2020 Earnings Report
Boston Beer reported an increase in revenue driven by shipment growth, offset by lower gross margins and higher operating expenses.
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.
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.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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