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Why Boston Beer Stock Rose 12% in February

By Demitri Kalogeropoulos - Mar 3, 2021 at 8:20AM

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Sales are still spiking in the Truly hard seltzer brand.

What happened

Boston Beer (SAM -1.41%) shareholders outperformed a rising market last month. Shares rose 12% in February compared to a 2.6% gain in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to huge gains for investors over the past year, with Boston Beer trouncing most peers in the alcoholic beverage industry.

A man shops for beer at a grocery store.

Image source: Getty Images.

So what

The company in late February announced earnings results that, while just below Wall Street's expectations, showed no slowdown in growth momentum. Runaway demand for the Truly hard seltzer brand helped push sales far higher through late 2020 despite several new competitive launches in the category. "Truly was the only national hard seltzer not introduced in 2020 to grow [market] share," CEO Dave Burwick told investors.

Now what

Boston Beer is still far from reaching the point when it can sustainably meet that surging demand without relying on outside brewers. As a result, profitability might fall again in early 2021 after declining last year.

But investors seem happy with that short-term earnings hit, so long as Truly continues to expand sales at a faster rate than rival brands from Constellation Brands, Anheuser-Busch InBev, and Molson Coors Beverage Company.

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Stocks Mentioned

The Boston Beer Company, Inc. Stock Quote
The Boston Beer Company, Inc.
SAM
$314.67 (-1.41%) $-4.50
Anheuser-Busch InBev SA/NV Stock Quote
Anheuser-Busch InBev SA/NV
BUD
$53.94 (-0.46%) $0.25
Molson Coors Beverage Company Stock Quote
Molson Coors Beverage Company
TAP
$55.36 (-0.72%) $0.40
Constellation Brands, Inc. Stock Quote
Constellation Brands, Inc.
STZ
$243.63 (-0.77%) $-1.89

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

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