Shares of Boston Beer (SAM -1.42%) were sliding Wednesday after the maker of Sam Adams beer, Truly hard seltzer, and other alcoholic beverages posted disappointing fourth-quarter results, continuing a recent pattern.

Boston Beer goes sour

Revenue continued to move in the wrong direction with sales falling 12% for the fiscal quarter, or 3.1% on a 13-week comparable basis, to $393.7 million, which was well below estimates at $413.8 million. (The company's fiscal 2022 Q4 included an extra week, complicating direct comparisons.) Depletions, a proxy for end-consumer demand based on unit sales from distributors to retailers, were down 9% year over year, or 1% on a 13-week comparable basis.

Management cited continued declines in sales of Truly hard seltzer for the dip in revenue, though those were offset by rising sales of Twisted Tea, Sam Adams non-alcoholic beverages, and Dogfish Head canned cocktails.

Gross margin increased from 37% to 37.6% due to price increases and procurement savings, even as the company continues to face headwinds from contractual shortfalls in third-party production capacity agreements.

On the bottom line, the company reported a loss of $1.49 per share in the seasonally weak quarter, which was worse than both the consensus estimate for a loss of $0.25 per share and  its loss of $0.93 per share in the prior-year quarter.

"As we look forward into 2024, we believe we have the right strategies in place to steadily improve our revenue and margin performance while continuing to invest in our brands and industry-leading salesforce," said Chairman Jim Koch in the earnings release.

What's next for Boston Beer

The company said that year to date, depletions are down 2%, and looking ahead, it expects depletions and shipments to be around flat for the year. It's also calling for price increases of 1% to 2%, implying a slight increase in revenue, and it's guiding for generally accepted accounting principles (GAAP) earnings per share of $7 to $11. That would be a significant improvement from the $6.21 per share it reported in 2023, but still below the $11.39 that the average analyst forecast called for.

At that expected profit level, Boston Beer stock still looks expensive. Its current valuation implies a recovery that has yet to materialize.