What happened

Shares of Boston Beer (SAM -1.42%) were up 18.2% as of 1 p.m. ET Friday, according to data provided by S&P Global Market Intelligence, after the craft brewing leader announced better-than-expected second-quarter 2023 results.

Boston Beer's results didn't look strong at first glance; revenue fell 2.1% year over year to $641.3 million, while net income arrived at $58 million, or $4.72 per share, up 9.5% year over year. However, both metrics easily outpaced analysts' consensus estimates, which called for earnings of only $3.45 per share on revenue of $599 million. 

So what

Digging deeper into Boston Beer's results, shipments declined 4.5% to 2.31 million barrels, and depletions -- a key metric for beer stocks measuring how quickly products travel from warehouses to consumer  -- were down 3% year over year, as growth from its Twisted Tea and Dogfish Head brands was more than offset by continued weakness across Boston Beer's Truly Hard Seltzer, Angry Orchard, Hard Mountain Dew, and flagship Samuel Adams varieties.

Boston Beer also noted that this quarter benefited from the timing of the July 4th holiday relative to its fiscal calendar last year. On a comparable-week basis, depletions fell 7%, and shipments declined 4.8% year over year.

Now what

"We saw improvement in our financial performance [...] as we continue to execute our operational plans," said Boston Beer chairman and founder Jim Koch. "[...] Our highly cash-generative business and strong balance sheet will not only fuel our 2023 brand investments, but have also enabled us to repurchase over $50 million in shares year to date."

Boston Beer also reiterated its previous guidance for a year-over-year decline in depletions and shipments ranging from 2% to 8%, and for earnings per share for all of 2023 to arrive in the range of $6.00 to $10.00.

In any case, it seems more likely Boston Beer will arrive at the high end of those ranges after this quarter's relative outperformance. This is a big step in the right direction as Boston Beer works to return its business to sustained top-line growth, and shares are understandably rallying in response.