Please ensure Javascript is enabled for purposes of website accessibility

Boston Beer's Core Brands Enjoy a Turn for the Better

By Steve Symington – Apr 26, 2018 at 9:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With improving trends for Samuel Adams and Angry Orchard, the craft brewer's turnaround appears to be gaining steam.

Boston Beer (SAM -2.57%) announced first-quarter 2018 results late Wednesday, highlighting a return to growth in shipment volumes and marked improvement in industry trends for its various beer, hard cider, and hard sparkling water brands. But Boston Beer also urged caution, opting to reaffirm its full-year guidance despite its strong start to 2018.

Let's take a deeper look, then, at what Boston Beer accomplished over the past few months and what investors can expect from the craft brewer in the coming quarters.

A can of Boston Beer's Sam '76 beer sitting next to a full Samuel Adams pint glass


Boston Beer results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Growth

Net revenue

$190.5 million

$161.7 million


Net income

$9.3 million

$5.7 million


Earnings per diluted share





What happened with Boston Beer this quarter?

  • Reported net income included a tax benefit of $0.23 per diluted share this quarter, as compared to a $0.28-per-share benefit in last year's first quarter, related to new accounting standards for stock-based compensation that were adopted at the start of 2017. Still, even excluding this item Boston Beer's results trounced investors' expectations for earnings of $0.30 per share on revenue of $175.9 million.
  • Revenue growth was driven by a 15% increase in shipment volume, to roughly 833,000 barrels.
  • Depletions -- a metric for measuring how quickly Boston Beer's products travel from warehouses to consumer outlets -- grew 8% year over year, marking a big improvement from last quarter's 2% decline. This improvement came as continued decreases from Samuel Adams brand varieties only partially offset increases from Twisted Tea, Truly Spiked & Sparkling, and Angry Orchard.
  • Gross margin improved by 3.3 percentage points year over year to 50.5%.
  • Repurchased roughly 119,000 shares of stock for $22.6 million, leaving $156.1 million remaining under Boston Beer's authorization as of April 20, 2018.

What management had to say

Boston Beer's new CEO, Dave Burwick, stated:

As I onboard to the Company, I'm focused on reviewing all areas of the business, with a focus on brand strategies that will enable the Company to return to long-term profitable growth. [...] We're excited that Twisted Tea continues to grow distribution and generate consumer pull, and that Truly Spiked & Sparkling is well positioned as a leader in the emerging segment of hard sparkling water. Samuel Adams performance improved in the first quarter due to the national launch of Sam '76 and increases in Seasonal volumes, but these positives were more than offset by declines in other Samuel Adams styles. We had a smooth seasonal transition to Samuel Adams Summer Ale late in the first quarter, which was a few weeks earlier than last year's second quarter transition.

Boston Beer founder and chairman Jim Koch added that the company has seen "significant improvement in Samuel Adams and Angry Orchard trends," driven by exciting early responses to its newest innovations such as Sam '76, Samuel Adams New England IPA, and Angry Orchard Rose.

But Koch also cautioned that in the increasingly crowded craft beer space, it's still "too early to fully understand repeat rates on these new products and therefore to draw conclusions on the long-term impact."

Looking ahead

Boston Beer reiterated its previous full-year outlook for earnings per share of between $6.30 and $7.30 (excluding the impact of its accounting changes), while admitting its volume outlook is still uncertain. Boston Beer also continues to expect 2018 gross margin of between 52% and 54%.

Still, there's an undeniable sense of optimism as Boston Beer's two largest brands -- Samuel Adams and Angry Orchard -- continue to benefit from improving trends and positive consumer response to newer varieties. Whether some of those varieties can keep consumers coming back for more remains to be seen. But I think this marks another big step in the right direction as Boston Beer strives to return all of its brands to sustained, profitable growth.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boston Beer Company, Inc. Stock Quote
The Boston Beer Company, Inc.
$323.65 (-2.57%) $-8.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.