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Shares of Boston Beer Co. Inc. Fall on Mixed Results, Weak Outlook

Image source: Boston Beer.

Boston Beer (NYSE: SAM  ) just reported fourth-quarter results, beating Wall Street's revenue estimates but falling short on the bottom line. Shares fell as much as 8.5% in after-hours trading.

The specialty beer brewer reported GAAP earnings of $1.33 per diluted share on $205 million in sales. That's a 6% year-over-year earnings increase and 29% higher sales. Analysts were looking for earnings of $1.51 per share on revenue near $193 million.

Looking ahead, Boston Beer's earnings guidance for fiscal year 2014 centers around $6.20 per share. The high end of management's projections falls below the current Street view at $6.47 per share.

Like other beer specialists, Boston Beer reports a metric known as depletion growth. Depletion refers to the rate of product shipments from distributors to consumers, stores, and entertainment establishments, and is not always the same as shipments from the producer to distributors.

In the fourth quarter and full year of 2013, Boston Beer's depletions grew 20% and 23%, respectively. In other words, revenues outgrew depletions in the fourth quarter. In 2014, the company expects a depletion rate between 16% and 20%.

Management kept a stiff upper lip, nonetheless.

"In the fourth quarter, our depletions growth remained strong and benefited from growth in our Samuel Adams, Twisted Tea and Angry Orchard brands," said Boston Beer CEO Martin Roper. "With the launch of several new beers, and our increased investment behind Twisted Tea and Angry Orchard, we believe we are well-positioned to maintain our momentum."

Read/Post Comments (5) | Recommend This Article (4)

Comments from our Foolish Readers

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  • Report this Comment On February 25, 2014, at 8:10 PM, mosman04 wrote:

    Suspect alot more downside here. Angry Orchard driving majority of Boston Beer's growth and both ABI and MillerCoors have major cider launches hitting shelves next month. Smith & Forge hard cider from MillerCoors looks especially interesting. Me thinks the Orchard will become very Angry indeed.

  • Report this Comment On February 26, 2014, at 9:43 AM, chopchop0 wrote:

    "ABI and MillerCoors have major cider launches hitting shelves next month"

    Nobody wants to drink their mass-produced low-quality product. The higher-income drinkers will stick with quality and stick with SAM.

  • Report this Comment On February 26, 2014, at 9:48 AM, snommis69 wrote:

    I hate when this happens. The company performed very well, sales grew, but they didn't meet the analyst's ridiculous expectations on EPS, so the price drops. Whatever, I'll continue to hold SAM, a solid, well managed company with tons of cash, no debt and excellent growth.

    @mosman04, the cider space is currently dominated by the Angry Orchard, even with several other ciders already out there in wide distribution. Regardless, cider is still niche compared to beer.

  • Report this Comment On February 26, 2014, at 10:19 AM, mosman04 wrote:

    Craft accounts for less than 10% of beer category volume. Angry Orchard has a 60% share of cider. They may be first mover on trend and will continue to grow, but they will represent a much smaller slice of the cider pie in 12 months. Scale players will drive mass market cider adoption. Angry O may still be a leader, but at closer to a 30% share. Timber....

  • Report this Comment On February 26, 2014, at 12:24 PM, snommis69 wrote:

    Yeah, I hear ya, but new ciders from big brewers have been rolling out - like Cidre from Stella (InBev). I'm more concerned about what happens when the cider fad dies out. Still, 60% market share of a small market is,well,small, right?

    In other news, someone must have heard me, because SAM has recouped it's losses today. LOL

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Anders Bylund

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

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9/4/2015 12:17 PM
SAM $207.52 Down -0.49 -0.24%
Boston Beer CAPS Rating: ****