It's time to belly up to the bar once again, investors. BostonBeer
What analysts say:
- Buy, sell, or waffle? Three analysts follow Boston Beer, but only one of them rates it a buy. The other two still recommend nursing your beers.
- Revenues. Analysts are calling for a 10% increase in quarterly sales, year over year, to $53.8 million.
- Earnings. Profits, however, are expected to rise only 4% to $0.28 per share.
What management says:
Sam's a quiet drinker, not producing so much as a belched 8-K since his earnings report back in March. But he gave investors an earful back then, I'll tell you -- a full four pages' worth of text. The long and the short of it is that founder and chairman Jim Koch was "pleased" with 2005 results and "optimistic" about 2006. And well he should be. Sales grew 10% for the year 2005 -- a little less than the 16% growth last quarter, but about the same as is projected for tomorrow -- and profits rose more than twice as fast, up 25% year over year.
CEO Martin Roper additionally pointed to "positive volume trends of the Better Beer and Craft beer categories" and in the firm's "Twisted Tea brand family" as well. He also promised to make further investments in the latter category, which is growing at more than twice the rate of the two former categories.
CFO Bill Urich sounded a cautionary note, however, that some of last year's sales growth was probably due to wholesalers building inventory. And inventory not sold last year is beer that wholesalers won't be ordering this year.
What management does:
It's steady as she goes at Sam's house. Gross margins have inched upwards just 60 basis points over the last 18 months, while rolling operating margins are right back where they were a year and a half ago, and the situation is very similar with rolling net margins. Meanwhile, the firm's profits keep rising (albeit in fits and starts) on the back of steadily growing sales.
|
Margins % |
9/04 |
12/04 |
3/05 |
6/05 |
9/05 |
12/05 |
|---|---|---|---|---|---|---|
|
Gross |
58.8 |
59.5 |
59.9 |
59.7 |
59.9 |
59.4 |
|
Op. |
9.8 |
9 |
10.7 |
10.3 |
10.6 |
9.8 |
|
Net |
6.3 |
5.8 |
6.9 |
6.8 |
7 |
6.5 |
One Fool says:
Is it better to sell more stuff at a lower profit margin, or less or the same amount of stuff but for stouter profits? Having your beer and drinking it, too, would, of course, be the best situation, but for now, Sam's investors seem to be satisfied with the way things are going at their company. Judging from this stock chart, at least, and from the firm's 21% gain in share price over the last 52 weeks as well.
Here's to a similarly successful first quarter on the morrow.
Competitors:
-
Anheuser-Busch
(NYSE:BUD) -
Pyramid
(NASDAQ:PMID) -
Red Hook
(NASDAQ:HOOK)
Anheuser-Busch is a Motley Fool Inside Value pick. Take the newsletter dedicated to dividend-payers for a 30-day free spin.
Fool contributor Rich Smith does not own shares of any company named above.
