Dive Brief:
- Third-quarternet revenue for the Boston Beer Companyslipped 3% to$247 million, down$6.4 millionfrom the same period last year. As the company announced results after markets closed Thursday, it indicated the revenue drop was due to a 4% decline in shipments, partially because of the timing of the July 4th holiday.
- Net income for the third quarter was$33.7 million, or$2.78 per diluted share — an increase of $2.1 million,or 30 centsper diluted share, from the same time frame last year. The net income bump was primarily due to lower general and administrative expenses, increases in gross margins, and a lower tax rate. These were partially offset by the drop in net revenue, the company noted.
- "We are encouraged by the improving total company depletions trends since the first quarter, but the on-premise channel remains challenging," Martin Roper, Boston Beer Company's president and CEO,在报告中称.
Dive Insight:
Boston Beer continues to be challenged by the general softening of the craft beer and cider categories and a competitive retail environment with a lot of beverage options, company chairman and founder Jim Koch said in the earnings report. But he also noted the company was encouraged by its fall seasonal programs boosting Samuel Adams Octoberfest varieties, and that it will be launching new media campaigns for both the Samuel Adams and Angry Orchards brands — including thefruit cider blendintroduced this fall.
根据这份报告,创新未来the company in the near term includeSamuel Adams Sam'76, which Koch called a "uniquely flavorful and refreshing lager ale union," Samuel Adams New England IPA and Angry Orchard Rosé.
妈ny brewers are strugglingalong with Boston Beer, although the craft brewer holds a distinct advantage over the mega-companies. According to the Brewers Association,small and craft brewers command a 12.3% market share—worth a total of $23.5 billion. Their share of the beer industry pie is increasing, even though the size of the pie itself is getting smaller.
And the struggle is real with Boston Beer both shipping and selling less than it did a year ago.The company remains concentrated on innovating,both in its beer and alternative alcoholic beverage products. These may help the craft brewer get back on top, but the earnings report shows projections of less full-year shipments and sales.
The question is whether the company can get millennials interested in drinking more of its beer. With the ability to create different flavor combinations and a company story dating back to the Revolutionary War, Boston Beer should have the same chance as any large brewer to recapture the millennial consumer.
A recent report by Credit Suissepredicted that Boston Beer's sales would continue to slide going into 2018. If the company is still suffering next year, analyst Laurent Grandet stated there is a "fair probability" that it will end up being an acquisition target. Grandetwrote to clients September 26 that Molson Coors and private equity firms could be potential buyers. Neither Molson Coors nor Boston Beer commented on the speculation.
The Credit Suisse report also noted that Koch, Boston Beer's chairman and founder, seems determined to turn the business around. While Roper has agreed to stay on as head of the company until a successor is found, plenty will depend on the leadership style of the next CEO and how well the new product innovations are received over the next few months.
