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Boston Beer Company Reported Increased Profits In Its Second Quarter

Boston Beer Company Reported Increased Profits In Its Second Quarter


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The brewery earned more than $5 million more in profits this quarter than last, thanks to increased sales and marketing

The beer company is sitting pretty on increased profits

Things are looking up for Boston Beer Company.

The popular beer maker that brews crowd favorites, like Samuel Adams, reported a second-quarter net income jump of 37 percent, according to the Associated Press. The increase can be attributed to amped up marketing practices and increased sales.

The company earned $19.7 million, or $1.45 per share, for the quarter that ended June 29. That was up from $14.4 million, or $1.06 per share, during the quarter that ended June 30, 2012, according to the AP.

This increase in profits has made the company more confident and able to expand, President and CEO Martin Roper told The AP. "Our business is healthy and we believe that the strength we see in our main brands may well reflect a response to our increased investments in media, local marketing and point of sale and the efforts of our increased sales force," he said.

Roper also told The AP that the company would continue its increased marketing tactics for the rest of the year.


Boston Beer Brews a Beat and Raise Following Its Dogfish Merger

In spite of continued challenges facing the craft beer market and the relative underperformance of its flagship Samuel Adams varieties, Boston Beer (NYSE:SAM) announced better-than-expected second-quarter 2019 results on Thursday after the markets closed. For that, the craft brewer once again credited the growing popularity of its Twisted Tea and Truly Hard Seltzer lines.

Of course, we can't forget that -- shortly after the quarter's end -- Boston Beer also closed on its $300 million merger with Dogfish Head Craft Brewery, diversifying its beer offerings and adding a lucrative source of incremental sales and profits in the process.

Let's settle in, then, for a more detailed taste of Boston Beer's performance to end the first half, as well as what investors should be watching in the coming quarters.


Boston Beer Reports Second Quarter 2020 Results

BOSTON, July 23, 2020 /PRNewswire/ -- The Boston Beer Company, Inc. (NYSE: SAM) reported second quarter 2020 net revenue of $452.1 million , an increase of $133.7 million or 42.0%, from the same period last year. Net income for the second quarter was $60.1 million , an increase of $32.3 million or 116% from the same period last year. Earnings per diluted share were $4.88 , an increase of $2.52 per diluted share from the second quarter of 2019. This increase was primarily due to increased revenue driven by shipment growth of 39.8%, partially offset by lower gross margins and increases in operating expenses.

Net revenue for the 26-week period ended June 27, 2020 was $782.7 million , an increase of $212.6 million , or 37.3%, from the comparable 26-week period in 2019. Earnings per diluted share for the 26-week period ended June 27, 2020 were $6.37 , an increase of $1.99 per diluted share or 45.4% from the comparable 26-week period in 2019.

The Company began seeing the impact of the COVID-19 pandemic on its business in early March. The direct financial impact of the pandemic has primarily shown in significantly reduced keg demand from the on-premise channel and higher labor and safety related costs at the Company's breweries. In the first half of 2020, the Company recorded COVID-19 related pre-tax reductions in net revenue and increases in other costs that total $14.1 million , of which $10.0 million was recorded in the first quarter and $4.1 million was recorded in the second quarter. The total amount consists of a $5.8 million reduction in net revenue for estimated keg returns from distributors and retailers and $8.3 million of other COVID-19 related direct costs, of which $5.6 million are recorded in cost of goods sold and $2.7 million are recorded in operating expenses. In addition to these direct financial impacts, COVID-19 related safety measures resulted in a reduction of brewery productivity. This has shifted more volume to third-party breweries, which increased production costs and negatively impacted gross margins. In April 2020 , due to uncertainties around COVID-19, the Company withdrew its full-year fiscal 2020 financial guidance. Despite the continued uncertainties related to the COVID-19 pandemic, the Company feels its business outlook has stabilized and that it is now appropriate to give full-year fiscal 2020 financial guidance and has provided such guidance later in this release. The Company will continue to assess and manage this situation and will provide a further update in its third quarter earnings release, to the extent that the effects of the COVID-19 pandemic are then known more clearly.

In the second quarter and the 26-week period ended June 27, 2020 , the Company recorded a tax benefit of .19 per diluted share and .35 per diluted share, respectively, resulting from the Accounting Standard "Employee Share-Based Payment Accounting" ("ASU 2016-09").

Highlights of this release include:

  • Reported depletions increased 46% and 43% from the 13- and 26-week comparable periods in the prior year.
  • Excluding the addition of the Dogfish Head brands beginning July 3, 2019 , depletions increased 42% and 38%, from the 13- and 26-week comparable periods in the prior year, respectively.
  • Reported shipments increased 39.8% and 36.5% from the 13- and 26-week comparable periods in the prior year.
  • Excluding the addition of the Dogfish Head brands beginning July 3, 2019 , shipments increased 35.3% and 31.9%, from the 13- and 26-week comparable periods in the prior year, respectively.
  • Full-year 2020 shipments and depletions growth is now estimated to be between 27% and 35%.
  • Gross margin was 46.4% for the second quarter, a decrease from 49.9% in the comparable 13-week period in 2019, and 45.7% for the 26-week period ending June 27, 2020 , a decrease from 49.7% in the comparable 26-week period in 2019. The Company's full-year gross margin target is now between 46% and 48%.
  • Advertising, promotional and selling expense increased by $6.3 million , or 6.7%, in the second quarter over the comparable period in 2019 and increased $32.4 million , or 19.6%, from the comparable 26-week period in 2019.
  • Based on current spending and investment plans, full-year 2020 Non-GAAP earnings per diluted share 1 , which excludes the impact of ASU 2016-09, is now estimated at between $11.70 and $12.70 .
  • Full-year 2020 capital spending is now estimated to be between $180 million and $200 million .

1 See "Outlook" below for additional information regarding non-GAAP forward-looking measures used in this press release.

Jim Koch , Chairman and Founder of the Company, commented, "As the world continues to grapple with the COVID-19 pandemic, our primary focus continues to be on operating our breweries and our business safely and supporting our partners in the beer industry. Supporting the communities in which we work and live is one of our core values and we are very happy that our Samuel Adams Restaurant Strong Fund has raised $5.4 million thus far to support bar and restaurant workers who are experiencing hardships in the wake of COVID-19. Working with the Greg Hill Foundation, this Fund is committed to distributing 100% of its proceeds through grants to bar and restaurant workers across the country. We achieved depletions growth of 46% in the second quarter, of which 42% is from Boston Beer legacy brands and 4% is from the addition of Dogfish Head brands. I am tremendously thankful for the efforts of our coworkers in achieving our ninth consecutive quarter of double-digit growth, while maintaining a focus on quality and innovation. We are also thankful to our outstanding distributors and retailers for their focus during COVID-19. Our business in the second quarter was strong, but uncertainties due to COVID-19 remain. These uncertainties include our ability to continue to operate our breweries at a level of safety that meets our standards, the continued ability to distribute to off-premise retail locations, and the timing of the re-opening of on-premise retail locations. We will continue to work hard throughout the COVID-19 pandemic and prioritize safety above all else. I am very proud of the passion, creativity and commitment to community that our company has demonstrated during this pandemic. We remain positive about the future growth of our brands and are happy that our diversified brand portfolio continues to fuel double-digit growth."

Dave Burwick , the Company's President and CEO stated, "Our depletions growth in the second quarter was a result of increases in our Truly Hard Seltzer and Twisted Tea brands and the addition of the Dogfish Head brands that were only partially offset by decreases in our Samuel Adams and Angry Orchard brands. The growth of the Truly brand, led by Truly Hard Lemonade, has accelerated and continues to grow beyond our expectations. Since early January, Truly has grown its velocity and its market share sequentially while other national, regional and local hard seltzer brands have entered the category. Truly is the only hard seltzer, not introduced earlier this year, to grow its share during 2020. We will continue to invest heavily in the Truly brand and work to improve our position in the hard seltzer category as competition continues to increase. We are excited about our new Truly advertising campaign that showcases colors, variety and joy to hard seltzer drinkers through four spots, but we have been deliberately slow to roll out this campaign given the consumer environment surrounding COVID-19 and it is too early to know if it will resonate with drinkers. Twisted Tea continues to generate double-digit volume growth rates that are well above full-year 2019 trends. We expect to increase our brand investments in the second half compared to the first half and see significant distribution and volume growth opportunities for our Truly, Twisted Tea and Dogfish Head brands. Samuel Adams and Angry Orchard's volumes continue to decline, as they are more deeply impacted by the effect of COVID-19 on on-premise retailers. We are encouraged that Samuel Adams Boston Lager and Angry Orchard Crisp Apple both have experienced double-digit growth in the measured off-premise channels during the quarter. We continue to work on returning these brands to growth, but do not expect them to grow during 2020 because of on-premise closures. I am pleased that our overall business has shown great momentum and depletion improvements during the first half of the year. Given our trends for the first half and our current view of the remainder of the year, we've adjusted our expectations for higher 2020 full-year earnings, depletions and shipment growth, which is primarily driven by the strong performance of our Truly and Twisted Tea brands."

Mr. Burwick continued, "We have adjusted our business to the COVID-19 environment and continue to work to control what we can control, with our primary focus being the safety of our coworkers, distributors, retailers and drinkers. We have deployed many safety protocols across our business and at our breweries, including entrance screening and temperature checks, face mask requirements, reorganized work spacing to increase physical distancing between and among shifts, and adding more cleaning and sanitation time to each shift. We are slowly re-opening our hospitality locations, which were closed since March, with a focus on outdoor service and takeout. Our accelerated depletions growth has been challenging operationally. We have been experiencing out of stocks and we expect wholesaler inventories to remain very tight for the rest of the summer. We have been operating at capacity for many months and have further increased our usage of third-party breweries in response to the growth. In particular, the additional Truly volumes have come at a higher incremental cost, due to an increased usage of third-party breweries, which is negatively impacting our gross margin expectation for the year. We are investing significantly in our supply chain, but do not expect these pressures to be relieved in the second half of the year. We will continue to invest to increase capacity, as appropriate to meet the needs of our business and take full advantage of the fast-growing hard seltzer category. We're in a very competitive business, but we are optimistic for continued growth of our current brand portfolio. We remain prepared to forsake short-term earnings as we invest to sustain long-term profitable growth, in line with the opportunities that we see."

2nd Quarter 2020 Summary of Results

Depletions increased 46% from the comparable 13-week period in the prior year. Shipment volume was approximately 1.9 million barrels, a 39.8% increase from the comparable 13-week period in the prior year.

The Company believes distributor inventory as of June 27, 2020 averaged approximately 2.5 weeks on hand and was lower than prior year levels due to supply chain capacity constraints. The Company expects wholesaler inventory levels in terms of weeks on hand to remain lower than prior year levels for the remainder of the year.

Gross margin of 46.4% decreased from the 49.9% margin realized in the comparable 13-week period in 2019, primarily as a result of higher processing costs due to increased production at third party breweries, partially offset by price increases and cost saving initiatives at Company-owned breweries.

Advertising, promotional and selling expenses increased $6.3 million from the comparable 13-week period in 2019, primarily due to increases in salaries and benefits costs, increased brand investments in media and production, the addition of Dogfish Head brand-related expenses beginning July 3, 2019 , and increased freight to distributors due to higher volumes partially offset by decreased investments in local marketing and national promotions due to timing of these costs compared to the prior year.

General and administrative expenses increased by $2.9 million from the comparable 13-week period in 2019, primarily due to increases in salaries and benefits costs and the addition of Dogfish Head general and administrative expenses beginning July 3, 2019 , partially offset by one-time Dogfish Head transaction-related fees of $1.5 million incurred in the second quarter of 2019.

The Company's effective tax rate for the second quarter decreased to 23.4% from 26.9% in the comparable period in 2019, primarily due to a higher tax benefit from stock option activity recorded in accordance with ASU 2016-09.

Year-to-Date 2020 Summary of Results

Depletions increased 43% from the comparable 26-week period in 2019, reflecting increases in the Company's Truly Hard Seltzer, Twisted Tea brands and the addition of the Dogfish Head brands that were only partially offset by decreases in the Samuel Adams and Angry Orchard brands.

Shipment volume was approximately 3.3 million barrels, a 36.5% increase from the comparable 26-week period in 2019.

Gross margin at 45.7% decreased from the 49.7% margin realized in the comparable 26-week period in 2019, primarily as a result of higher processing costs due to increased production at third party breweries and higher processing costs and finished goods keg inventory write-offs at Company-owned breweries of which $5.6 million was direct costs related to COVID-19, partially offset by price increases and cost saving initiatives at Company-owned breweries.

Advertising, promotional and selling expenses increased $32.4 million from the comparable 26-week period in 2019, primarily due to increased investments in media and production, higher salaries and benefits costs, the addition of Dogfish Head brand-related expenses beginning July 3, 2019 , and increased freight to distributors due to higher volumes.

General and administrative expenses increased by $6.6 million from the comparable 26-week period in 2019, primarily due to increases in salaries and benefits costs and the addition of Dogfish Head general and administrative expenses beginning July 3, 2019 , partially offset by the Dogfish Head transaction-related fees of $1.5 million incurred in the second quarter of 2019.

Impairment of long-lived assets increased $2.1 million from the first half of 2019, primarily due to write-downs of brewery equipment at the Company's Cincinnati brewery.

The Company's effective tax rate for the 26-week period ended June 27, 2020 decreased to 21.4% from 24.1% in the comparable 26-week period in 2019. This decrease was primarily due to a higher tax benefit from stock option activity recorded in accordance with ASU 2016-09.

The Company expects that its June 27, 2020 cash balance of $86.7 million , together with its future operating cash flows and the $150.0 million unused balance on its line of credit, will be sufficient to fund future cash requirements.

During the 26-week period ended June 27, 2020 and the period from June 28, 2020 through July 18, 2020 , the Company did not repurchase any shares of its Class A Common Stock. As of July 18, 2020 , the Company had approximately $90.3 million remaining on the $931.0 million share buyback expenditure limit set by the Board of Directors.

Year-to-date depletions through the 28-week period ended July 11, 2020 are estimated by the Company to have increased approximately 42% from the comparable period in 2019. Excluding the Dogfish Head impact, depletions are estimated to have increased approximately 37%.

The Company currently projects full year 2020 earnings per diluted share to be between $11.70 and $12.70 . This projection excludes the impact of ASU 2016-09. The Company's actual 2020 earnings per share could vary significantly from the current projection. Underlying the Company's current 2020 projection are the following full-year estimates and targets:


Boston Beer Shares Trade 20% Higher on Strong Q2 Financial Results and Positive FY Outlook

July 27, 2020 (Investorideas.com Newswire) Shares of Boston Beer Company reached a new 52-week high after the company reported Q2/20 financial results that included a 42% y-o-y increase in net revenue.


Boston Beer Company Inc. (SAM:NYSE) yesterday announced quarterly financial results for its second quarter ending June 27, 2020.

The firm reported that in Q2/20, it posted net revenue of $452.1 million, an increase of $133.7 million or 42.0%, compared to Q2/19. In the same period, net income increased 116% to $60.1 million compared to $32.3 million in Q2/19. The firm stated that earnings per diluted share in Q2/20 were $4.88, compared to $2.36 in Q2/19. The company claimed that the earnings gain was mostly due to increased revenue driven by shipment growth of 39.8%, but was partially offset by lower gross margins and increased operating expenses.

The firm additionally noted that net revenue for H1/20 increased 37.3% to $782.7 million, versus $570.1 million in H1/19 and that earnings per diluted share for the 26-week period ended June 27, 2020 increased 45.4% to $6.37, compared to $4.38 in the same corresponding period last year.

The company said that it started seeing the first impact of the COVID-19 pandemic on its business in early March and that it significantly reduced keg demand from the on-premise channel and that it had experienced higher labor and safety related costs at its breweries.

The company's Chairman and Founder Jim Koch remarked, "As the world continues to grapple with the COVID-19 pandemic, our primary focus continues to be on operating our breweries and our business safely and supporting our partners in the beer industry. Supporting the communities in which we work and live is one of our core values and we are very happy that our Samuel Adams Restaurant Strong Fund has raised $5.4 million thus far to support bar and restaurant workers who are experiencing hardships in the wake of COVID-19. We achieved depletions growth of 46% in the second quarter, of which 42% is from Boston Beer legacy brands and 4% is from the addition of Dogfish Head brands..We remain positive about the future growth of our brands and are happy that our diversified brand portfolio continues to fuel double-digit growth."

The firm's President and CEO Dave Burwick commented, "Our depletions growth in the second quarter was a result of increases in our Truly Hard Seltzer and Twisted Tea brands and the addition of the Dogfish Head brands that were only partially offset by decreases in our Samuel Adams and Angry Orchard brands. The growth of the Truly brand, led by Truly Hard Lemonade, has accelerated and continues to grow beyond our expectations. Twisted Tea continues to generate double-digit volume growth rates that are well above full-year 2019 trends. We expect to increase our brand investments in the second half compared to the first half and see significant distribution and volume growth opportunities for our Truly, Twisted Tea and Dogfish Head brands."

"Samuel Adams and Angry Orchard's volumes continue to decline, as they are more deeply impacted by the effect of COVID-19 on on-premise retailers. We are encouraged that Samuel Adams Boston Lager and Angry Orchard Crisp Apple both have experienced double-digit growth in the measured off-premise channels during the quarter. Given our trends for the first half and our current view of the remainder of the year, we've adjusted our expectations for higher 2020 full-year earnings, depletions and shipment growth, which is primarily driven by the strong performance of our Truly and Twisted Tea brands," CEO Burwick added.

The company advised that it projects FY/20 earnings per diluted share to be between $11.70 and $12.70 excluding the impact of ASU 2016-09. The firm stated that the projections are based on expectations that depletions and shipments percentage increases 27-35% of which 1-2% of this growth is due to the addition of the Dogfish Head brands, price increases nationwide of 1-2% and a gross margin of 46-48%.

Boston Beer Company is an alcoholic beverage company that began in 1984 brewing Samuel Adams beer and has since expanded by adding several other craft beer brands and other hard cider and seltzer beverages. The firm's brand portfolio includes Angry Orchard Hard Cider, Truly Hard Seltzer, Twisted Tea and craft beer brands Angel City Brewery, Coney Island Brewing, Concrete Beach Brewery and Dogfish Head Brewery.

Boston Beer began the day with a market capitalization of around $8.0 billion with approximately 12.18 million shares outstanding and a short interest of about 9.3%. SAM shares opened almost 8% higher today at $711.20 (+$51.97, +7.88%) over yesterday's $659.23 closing price and reached a new 52-week high price this morning of $813.04. The stock has traded today between $703.99 and $813.04 per share and is currently trading at $792.97 (+$133.99, +20.88%).

1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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1995-1996: Going Public

Prompted by its forward momentum, Boston Beer made the decision to go public in 1995, offering 3.1 million shares in November. Of those, it held back 990,000 shares, directing these toward its loyal customers. These customers included not only the bar owners, shop owners, and wholesalers who distributed company products every six-pack of Samuel Adams sold at retail came with a mail-in coupon for discounted shares in Boston Beer ’ s growing operation. More than 130,000 customers were quick to invest in a piece of their favorite brew. By the close of the year, the company reported net income of $5.9 million on revenues of $151.3 million. Production was a record 961,000 barrels divided among an increasing array of products that included Samuel Adams Brand Ale, Boston Lager, Cream Stout, Honey Porter, and Triple Bock, as well as such tempting seasonal variations as Cranberry Iambic and Winter Lager. In addition, the company produced and marketed beers under the Boston Lightship brand. The Oregon Original brands, brewed by the company-owned Oregon Ale and Beer Company, had also been introduced to most major markets by 1995.

Company Perspectives:

We will continue our uncompromising pursuit of perfect beer. We will add new and interesting beers, but only if we can brew a style better than any other brewery.

Not surprisingly, Boston Beer ’ s success spawned a host of imitators. In fact, throughout the early 1990s, approximately 55 new breweries were established each year. Of these, the company perceived a real threat in the similarly named Boston Beer Works. Although Boston Beer would sue the coattail brewery, it lost the suit in 1994.

Much of the success of Boston Beer was its ability to foster and stay on top of a niche market for the second-most popular beverage in the world (the first being tea). Unlike other microbrewers — skilled craftspeople who pride themselves on small-batch production and local distribution, often eschewing the “ business ” side of the business by leaving advertising to word of mouth — Boston Beer was ambitious. A tiger in the industry, it went for the jugular, directly challenging high-priced imports like Heineken, St. Pauli Girl, and Beck ’ s. Strategically avoiding head-to-head combat with domestic giants like Miller Brewery, Anheuser-Busch, and Budweiser, whose highly financed promotional “ lifestyle ” campaigns featured frogs, dogs, and buxom, bikini-clad beach babes, Boston Beer aimed for a share of the import market. Instead of gearing its product toward twentysomething middle-class males, Samuel Adams targeted connoisseurs, beer aficionados with an eye for quality and a taste for an exceptional product. Advertising the weaknesses of imported beers, namely, that foreign brews headed for the United States have fewer premium ingredients, a “ lighter ” taste, and are less fresh because of long shipping times (like other perishable foodstuffs, beer “ goes sour ” and loses its flavor and quality after as little as four months), the company prided itself on the quality of ingredients and brewing skill it brought to its products. By directly tackling the premium imports, Boston Beer created a new marketing niche, domestically brewed premium beer, and assumed a leadership position within the growing specialty beer market.

In addition to encouraging other beer-brewing entrepreneurs, the major U.S. breweries did not respond to the advances made by Boston-based upstart Koch by lying down. Watching a segment of a relentlessly sluggish beer market mushroom almost overnight would tantalize any businessperson. Beer giants Anheuser-Busch, Coors, and the Philip Morris-owned Miller Brewery used their leverage to try to restrict the supply of raw materials and national distribution network of the entire microbrewery industry, a $400 million market divided among almost 500 brewers by 1994. Their efforts forced many craft brewers to confine their distribution within regional markets, with a select few becoming the targets of takeovers as the giants maneuvered for a piece of the growing microbrew pie.

The “ if you can ’ t beat ‘ em, join ‘ em ” strategy proved to be increasingly popular. Adopting an increasing array of small-scale guises, such as Miller ’ s nonexistent Plank Road Brewery (Miller ’ s original name in 1855), the major breweries attempted to cash in on the micro movement by introducing a battery of so-called “ craft ” beers into the high-end marketplace. Aesthetically appealing labels proclaiming brands like Red Dog, Killian, Blue Moon, Elk Mountain, Eisbock, Leinenkugel, Red Wolf House, and Augsburger filled retail beer shelves and popped up in point-of-sale tavern displays. Even importers responded to the competition by distributing “ micros ” of their own, such as Heineken ’ s Tarwebok and Labatt ’ s Moretti La Rossa.

In its position as microbrewery industry leader, Boston Beer encouraged cultivation of the brewmeister ’ s art. In 1995 it organized the first annual World Homebrew Championships, a summer gathering of 60 judges entrusted with the task of choosing the best among brews from around the world. Three category winners were announced in 1996 and their brews successfully marketed by the company under the names Long-Shot American Pale Ale, LongShot Hazelnut Brown Ale, and LongShot Black Lager. Meanwhile, Koch continued to indulge in the brewer ’ s art, deriving new brews for the discerning palate. During 1995 he introduced three new products — Scotch Ale, Cherry Wheat Ale, and Old Fezziwig Ale — increasing the company ’ s product line to 14. Triple Bock, first introduced in 1994, is a dark, sherry-like barley beer that is aged in oak casks. An acquired taste, it is a sipping beer that boasts a 17 percent alcohol level. Boston Beer ’ s spicy Cherry Wheat Ale, introduced as a seasonal brew, became an annual product due to customer demand. The second World Homebrew Contest generated a second series of LongShot beers, which were available in limited quantities in select markets, but in 1997, the contest itself was put on hiatus.

Key Dates:

Despite its ranking as one of the top ten brewers in the United States, Boston Brewery prided itself on being a small fish in an ocean containing a few large sharks in the mid-1990s, the combined sales of the entire U.S. microbrewery industry accounted for less revenue than the total sales of Michelob Light in any one year. In a market dominated by a handful of giants, tenth-ranked Boston Brewery is, in the words of Koch, “ like being the 12th largest car company. ” Anheuser-Busch ’ s production had reached the millionth barrel by the first week of the year, Koch explained to writer Greg W. Prince in the December 1994 issue of Beverage World. “ When I tell people we ’ re one five-hundredth of the beer business … [they] are surprised at how small we really are. ”


Boston Beer Profit Rises Even as Samuel Adams Brand Shows Weakness

Jim Koch, chairman and founder of Boston Beer Co., speaks during a Bloomberg Television interview in New York, U.S., on Thursday, April 3, 2014.

Maria Armental

Boston Beer Co. , the maker of Samuel Adams Boston Lager, on Thursday reported second-quarter profit rose on higher sales volume, even as demand for its iconic brand continues to show signs of weakness.

Chief Executive Martin Roper said new packaging and an advertising campaign were planned but said the company doesn’t expect brand results to rebound until next year.

In a conference call with analysts Thursday afternoon, Mr. Roper declined to offer specifics but said company officials plan to talk to wholesalers and retailers in October.

Shares, which closed at $223.47 on Thursday and were initially up 5% in late trading, are now down 5% to $212.


Boston Beer stock rallies 6% as Q2 sales increase

Boston Beer Co. said shipments shot up in the second quarter, reflecting heightened demand from distributors for several of its brands as consumers purchased alcoholic beverages for home consumption with many bars closed amid the Covid-19 pandemic.

The company, however, also warned it has been struggling with out-of-stock products. "We expect wholesaler inventories to remain very tight for the rest of the summer," Chief Executive Dave Burwick said.

The company reported a profit of $60.1 million, or $4.88 a share, compared with $27.9 million, or $2.36 a share, last year.

Revenue rose to $452.1 million from $318.4 million, Boston Beer said.

Boston Beer has been operating at capacity for months, Mr. Burwick said, forcing it to hire third-party breweries amid the growth.

The brewer reported depletions, or sales by the wholesalers who buy its products to their retail customers, grew 42% in its second quarter that ended June 27, after excluding Dogfish Head brands. Shipments were up about 35%, excluding Dogfish.

The company last year acquired the Dogfish Head brand, affecting year-over-year comparisons.

Depletions were driven in the quarter by increased demand for the company's Truly Hard Seltzer and Twisted Tea brands, partially offset by decreases tied to the Samuel Adams and Angry Orchard brands, Mr. Burwick said.

Boston Beer said it started seeing the effects of the coronavirus on its business early in March, with the most direct financial impact taking the form of reductions in demand for kegs of beer from restaurants and bars, as well as higher labor and safety costs.

The company recorded Covid-19 related pre-tax reductions in net revenue or increases in costs of $4.1 million in the second quarter, on top of $10 million in the first, it said Thursday.


Boston Beer Reports Second Quarter 2013 Results

BOSTON, July 31, 2013 /PRNewswire/ -- The Boston Beer Company, Inc. (NYSE: SAM) reported second quarter 2013 net revenue of $181.3 million , an increase of $33.8 million or 23%, over the same period last year, mainly due to core shipment growth of 21%. Net income for the second quarter was $19.7 million , or $1.45 per diluted share, an increase of $5.4 million or .39 per diluted share from the second quarter of 2012. This increase was primarily due to shipment increases, partially offset by increased investments in advertising, promotional and selling expenses.

Earnings per diluted share for the 26-week period ended June 29, 2013 was $1.96 , an increase of .35 from the comparable 26-week period in 2012. Net revenue for the 26-week period ended June 29, 2013 was $317.3 million , an increase of $56.5 million , or 22%, from the comparable 26-week period in 2012.

Highlights of this release include:

  • Depletions grew 24% and 21% from the comparable 13 and 26 week periods in the prior year.
  • Second quarter gross margin was 54% the Company has reduced its full year gross margin target to between 52% and 54% from between 53% and 55% primarily due to increases in ingredient costs and product mix.
  • Advertising, promotional and selling expense and customer program and incentive costs increased by a combined $9.1 million or 21% in the quarter, primarily due to planned increased investments behind the Company's brands.
  • Advertising, promotional and selling expenses exclude $3.0 million of customer program and incentive costs that were classified as reductions in revenue in the second quarter of 2013. Customer program and incentive costs were reported in advertising, promotional and selling expense in the second quarter of 2012.
  • Full year 2013 depletions growth is now estimated to be between 17% and 22%, an increase from the previously communicated estimate of 10% to 15%.
  • Full year 2013 earnings per diluted share are now estimated to range from $5.10 to $5.40 , an increase from the previously communicated estimate of $4.70 to $5.10 .
  • Full year 2013 capital spending is now estimated to be between $100 million to $140 million , an increase from the previously communicated estimate of $85 million to $105 million .

Jim Koch , Chairman and Founder of the Company, commented, "We achieved depletions growth of 24% and record total depletions in the second quarter. Depletions growth in the second quarter improved from our first quarter results of 16%, primarily due to the improved growth of our Samuel Adams Seasonal program and our Samuel Adams Boston Lager . We believe that our depletions growth is attributable to strong sales execution and support from our wholesalers and retailers as well as our great quality beers and strong brands. We were also delighted to learn, that for the fifth year in a row, our wholesalers ranked us the number one beer supplier in the industry, in the annual poll of beer wholesalers conducted by Tamarron Consulting, a consulting firm specializing in the alcohol beverage distribution industry. This is a testament to the efforts of all Boston Beer employees to service and support our wholesalers' business and to the relationships we have built with them. We continue to innovate and during the quarter we released Samuel Adams Boston Lager and Samuel Adams Summer Ale packaged in our new unique can which has been well received by wholesalers and drinkers and is generally in line with our expectations from a volume perspective."

Martin Roper , the Company's President and CEO, stated, "In the second quarter, our depletions growth accelerated from prior trends, due to the health of our Samuel Adams beers and the increased distribution of Angry Orchard, which was rolled out nationally during the second quarter of 2012. Our business is healthy and we believe that the strength we see in our main brands may well reflect a response to our increased investments in media, local marketing and point of sale and the efforts of our increased sales force. Accordingly, we have increased our expectations for full-year depletions growth to between 17% and 22% to reflect the current trends and to take advantage of the opportunities that we see, we are increasing our planned investment in our sales force and our support behind our brands for the remainder of the year. We also continue to invest at a high rate in capital improvements in our brewing and packaging capabilities to support our product innovation and brand growth. These improvements include our new can line that began production this quarter and a new bottling line which started initial ramp-up late in the quarter. I would like to recognize the significant efforts of our brewery employees in supporting these start-ups and reacting to the brand acceleration that we have seen. The growth has been challenging operationally and we have had some product shortages and service issues at the end of the quarter. We have been operating at capacity during peak weeks and have increased our usage of third party breweries above plan during the quarter as a reaction, but were unable to meet peak week demand. We expect the new bottling line will help relieve these pressures, as it comes up to speed during the third quarter. Based on the accelerated growth and to address current capacity bottlenecks, we anticipate accelerating capacity and efficiency improvements at our breweries and accordingly are raising our capital spend expectations for 2013 and 2014. We also expect a continued high level of brand investment as we pursue growth and innovation. We are prepared to forsake the earnings that may be lost as a result of these investments in the short term, as we pursue long term profitable growth."

Mr. Roper continued, "Alchemy & Science, our craft brew incubator, continues to progress with its existing brands, which include the Angel City Brewery, Traveler Beer Company and the Just Beer Project. To date, sales from Alchemy & Science brands have not been significant. Our latest 2013 financial projection includes estimated brand investments attributable to existing Alchemy & Science projects of between $4 million and $6 million and capital investments of between $4 million and $7 million , but these estimates could change significantly when new brands are added. There is no guarantee that the 2013 volume of Alchemy & Science brands will fully cover these and other expenses that could be incurred. We continue to look for complementary opportunities that do not distract us from our primary focus on Samuel Adams, as we believe a portfolio of growing brands is a good outcome for our wholesalers and for us."

Commenting on the Company's Freshest Beer Program, Mr. Roper said, "We currently have 120 wholesalers representing over 65% of our volume in our Freshest Beer Program and believe this could reach 75% by the end of 2013. We continue to evaluate whether we can reduce inventory levels further and to invest in the breweries to improve their support of the Program particularly during peak selling periods."

2nd Quarter 2013 Summary of Results

Depletions grew 24% from the comparable 13-week period in the prior year primarily due to increases in Angry Orchard ® , Samuel Adams ® and Twisted Tea ® .

Core shipment volume was approximately 837,000 barrels, a 21% increase compared to the second quarter of 2012.

Inventory at wholesalers participating in the Freshest Beer Program was lower by an estimated 267,000 cases at June 29, 2013 compared to June 30, 2012 .

Gross margin at 53.6% was slightly lower than the 54.5% in the second quarter of 2012. Increased ingredient and processing costs, combined with $3.0 million of customer program and incentive costs that are now recorded as reductions in revenue, were partially offset by pricing increases. In the second quarter of 2012, customer programs and incentive costs were recorded as advertising, promotional and selling expenses.

Advertising, promotional and selling expenses, excluding 2013 customer program and incentive costs of $3.0 million that were reported as a reduction in revenue, were $6.1 million higher than costs incurred in the second quarter of the prior year. The combined increase of $9.1 million in advertising promotional and selling and customer program and incentive costs was primarily a result of increased investments in local marketing and media advertising, costs for additional sales personnel and increased freight to wholesalers due to higher volumes.

General and administrative expenses increased $2.1 million compared to the second quarter of 2012, primarily due to increases in salary and benefit costs.

Year to Date 2013 Summary of Results

Depletions grew by 21% from the comparable 26-week period in 2012, primarily due to increases in Angry Orchard, Samuel Adams, and Twisted Tea.

Core shipment volume was approximately 1.5 million barrels, a 20% increase from the comparable 26-week period in 2012.

Advertising, promotional and selling expenses, excluding 2013 customer program and incentive costs of $5.2 million that were reported as a reduction in revenue, were $11.1 million higher than costs incurred in the comparable 26-week period in 2012. The combined increase of $16.3 million in advertising, promotional and selling and customer program and incentive costs was primarily a result of increased costs for additional sales personnel, increased local marketing and media advertising and increased freight to wholesalers due to higher volumes.

General and administrative expenses increased by $5.2 million from the comparable 26-week period in 2012, due to increases in salary and benefit costs and consulting costs.

Cash and cash equivalents as of June 29, 2013 totaled $24.9 million .

During the second quarter, the Company repurchased approximately 94,000 shares of its Class A Common Stock at a cost of approximately $14.9 million . The Company had no repurchases during the period June 30, 2013 through July 26, 2013 . As of July 26, 2013 the Company had approximately $25.5 million remaining on the $325.0 million share buyback expenditure limit set by the Board of Directors.

Year-to-date depletions through the 29 weeks ended July 20, 2013 are estimated by the Company to be up approximately 22% from the comparable period in 2012.

The Company increased its projection of 2013 earnings per diluted share to between $5.10 and $5.40 . The Company's actual 2013 earnings per share could vary significantly from the current projection. Underlying the Company's current projection are the following estimates and targets:

  • Depletions and shipments growth of between 17% and 22%.
  • Price increases per barrel of approximately 1% to partially offset anticipated ingredients, packaging, freight and processing cost pressures.
  • Full-year 2013 gross margins of between 52% and 54%, due to anticipated price increases not fully covering anticipated cost pressures and some product mix changes.
  • Increased advertising, promotional and selling expenses of between $20 million and $26 million for the full year 2013, primarily due to planned increased investments behind the Company's brands and excluding any increases in freight costs for the shipment of products to the Company's wholesalers.
  • Increases of between $4 million and $6 million for continued investment in existing brands developed by Alchemy & Science, which are included in our full year estimated increases in advertising, promotional and selling expenses. Additional projects yet to be launched or acquired may significantly increase investments in Alchemy & Science and advertising, promotional and selling expenses.
  • Full-year effective tax rate of approximately 37%.
  • Full-year 2013 spending on capital investments is now estimated to be between $100 million and $140 million , most of which relate to continued investments in the Company's breweries and additional keg purchases. The wide range is a result of equipment currently anticipated to be delivered to the breweries in late December 2013 , which could be delayed.
  • Full-year 2014 capital spending is now estimated to be between $100 million to $130 million , an increase from the previously communicated estimate of $30 million to $50 million .

The Boston Beer Company began in 1984 with a generations-old family recipe that Founder and Brewer Jim Koch uncovered in his father's attic. After bringing the recipe to life in his kitchen, Jim brought it to bars in Boston with the belief that drinkers would appreciate a complex, full-flavored beer, brewed fresh in America. That beer was Samuel Adams Boston Lager ® , and it helped catalyze what became known as the American craft beer revolution.


Early history Edit

The Boston Beer Company was founded in 1984 by James "Jim" Koch and Rhonda Kallman. [4] The initial beer offering was Samuel Adams Boston Lager, a 4.8% abv amber or Vienna lager. [5] Koch, the sixth-generation, first-born son to follow in his family's brewing footsteps, brewed his first batch of the beer in his kitchen, using the original family recipe for Louis Koch Lager. [6] At the time, Koch was working at Boston Consulting Group after receiving BA, MBA and JD degrees from Harvard University. While serving in his role as a manufacturing consultant at BCG, Koch developed a business plan for a locally focused beer company. He invested $100,000 of his own money and raised additional funds from investors, family members, and friends including former classmates and BCG colleagues. [1] [4] The company was organized as a limited liability partnership most early investors did not have active roles in the company. [7] However, one early investor, John B. Wing, held a board seat until 2002. [8]

Koch named his beer after the Boston patriot Samuel Adams, who fought for American independence, and who also had inherited a brewing tradition from his father. [9] In March 1985, Koch introduced the beer as Samuel Adams Boston Lager, over Patriot's Day weekend which honors the first battle of the American Revolution and today is more widely known for the running of the Boston Marathon. Six weeks later, Samuel Adams was voted "Best Beer in America" at the Great American Beer Festival, [1] in which 93 national and regional beers competed. The beer was first put on tap at Doyle's Cafe in Jamaica Plain. [10]

Initially, Koch rented excess capacity and brewed the beer at the Pittsburgh Brewing Company, best known for their Iron City brand of beer. As sales increased Koch developed other contract arrangements at various brewing facilities with excess capacity, ranging from Stroh breweries, Portland's original Blitz-Weinhard brewery (shuttered in 1999), Cincinnati's Hudepohl-Schoenling brewery (eventually purchased by the Boston Beer Company in early 1997), and industry giant SABMiller. The Boston Beer Company also has a small R&D brewery located in Boston (Jamaica Plain), Massachusetts, where public tours and beer tastings are offered. The brewery occupies part of the premises of the old Haffenreffer Brewery. [11] [12]

1990s – present Edit

In 1997, Jim Koch returned to his hometown of Cincinnati to purchase the Hudepohl-Schoenling Brewery, where his father apprenticed in the 1940s. This was also an important step the company took to reduce reliance on contract brewing. [13]

The Boston Beer Company went public, selling shares of Class A Common Stock on the New York Stock Exchange, under the ticker symbol, "SAM". These shares, however, have no voting rights, while the company is controlled through its Class B Common Stock, of which Koch owns 100% of the shares. [14]

Boston Beer launched Hardcore Cider in 1997, and Twisted Tea brand in 2000. In 2007, the Boston Beer Company purchased the former F. & M. Schaefer Brewing Company brewery in Breinigsville, Pennsylvania, in the Lehigh Valley. [15] [16] The brewery had been owned by Diageo North America, Inc. and used for the production of Smirnoff Ice malt beverages since 2001. [16] By 2012, Samuel Adams was producing two-thirds of all its beer at the Breinigsville facility, and it has increased brewing capacity there. [16] In 2012 Boston Beer Company launched Angry Orchard hard cider company based in Cincinnati, Ohio. [17]

On May 9, 2019, Boston Beer Company acquired Delaware-based Dogfish Head Brewery for $300 million. [20] As part of the merger, Dogfish Head owner Sam Calagione and his wife, Mariah, became the second biggest non-institutional owners of Boston Beer Company. [21]

Following Jim Koch's great-great grandfather's recipe, Samuel Adams continued to use traditional brewing processes, including decoction mash (a four vessel process) and krausening (a secondary fermentation). Boston Lager is also dry hopped using the Hallertau Mittelfrueh and Tettnang Tettnanger hops. [22]

First brewed in 2014, Samuel Adams Rebel IPA is a West Coast style India Pale Ale. The beer is brewed with five American hops - American Cascade, Simcoe, Chinook, Centennial, and Amarillo. [23] In early 2015, Samuel Adams released Rebel Rouser, a double India Pale Ale, and Rebel Rider, a session India Pale Ale.

Introduced in 2001, Sam Adams Light was the second light beer the company brewed. There was consideration to name the brew "Turtle Adams" after Sam Adams’ pet turtle. The company previously sold Boston Lightship, which was introduced in 1987. [24]

Samuel Adams Barrel Room Collection

These Belgian style beers are left in large wood barrels to age and pick up some of the flavors of the wood. [25] The beers in this collection are American Kriek, New World, Stony Brook Red, Thirteenth Hour and Tetravis. [26]

The company followed this up in 2002 with Utopias at 24% ABV, it was marketed as the strongest commercial beer in the world (a mark that has since been challenged). The company subsequently released new "vintages" of Utopias annually, increasing the alcoholic content to 27% ABV by 2007.

Utopias is made with caramel, Vienna, Moravian and Bavarian smoked malts, and four varieties of noble hops: Hallertauer Mittelfrüh, Tettnanger, Spalter, and Saaz hops. The beer is matured in scotch, cognac and port barrels for the better part of a year. A limited number of bottles are released each year in 2007, only 12,000 bottles were produced, and in 2009, only 9,000 bottles were released. [27] [28] Sold in a ceramic bottle resembling a copper-finished brewing kettle, a single bottle of Utopias cost $100 in 2002, and $150 in 2009.

Because of legal restrictions, Utopias is not offered in the states of Alabama, Georgia, Idaho, New Hampshire, North Carolina, Oregon, South Carolina, Vermont, or West Virginia. [29]

Triple Bock was released in 1994, 1995, and 1997. It has a black, opaque color, no carbonation, and at 17.5% ABV it was the strongest beer brewed at the time it was introduced. [30] Maple syrup was added in the brewing process. Triple Bock was a "forerunner" of later strong beers from Samuel Adams — Millennium (21% ABV released in 1999 only), and Utopias (24–26% ABV first released in 2002).

In addition to year-round offerings, Samuel Adams also has four seasonal offerings. The spring seasonal beers are Cold Snap, a Witbier and Escape Route, a Kölsch. The spring seasonals are sold from January to March. The Summer offerings are available from April through August and include Summer Ale, a wheat ale and Porch Rocker, a radler. The Autumn seasonal beers are available August through October and are Octoberfest, a Marzen and Pumpkin Batch, a saison with pumpkin. The Winter/Holiday seasonal beers are available November through December and are, Winter Lager, a Bock and White Christmas an Ale. [31]

Samuel Adams also offers seasonal variety packs that include a mix of year-round and seasonal offerings. [31] [32]

Samuel Adams began offering ciders in 1995. The company has both year-round and seasonal cider offerings, which since 2012 have been sold under the Angry Orchard brand name. [33]

Beginning in 2001, Boston Beer began to produce Twisted Tea, a 5% abv malt beverage marketed as a "hard iced tea". Its brand portfolio has since grown to include a number of flavored varieties, including a "half and half" variant designed to mimic an Arnold Palmer, and is primarily marketed in the American southeast.

Boston Beer Company launched a line of hard seltzers in 2016 under the brand name Truly Spiked & Sparkling. [34]

Boston Beer operates a number of other sub-brands, including The Traveler Brewing Company (which focuses on shandy variants), Coney Island Brewing Company (purchased from Schmaltz Brewery and brewing a nationally available line of hard sodas in addition to beer exclusive to the New York City market), and also owns the Los Angeles-based Angel City Brewery and the Concrete Beach Brewery in Miami.

In October 2009, the Boston Beer Company announced a two-year project with German brewery Bayerische Staatsbrauerei Weihenstephan to jointly produce a new craft beer named Infinium, to be marketed in both Germany and the U.S. [35] The brewers described the beer, which was sold in corked bottles and had alcohol content of 10.3% abv, as a Champagne-like "crisp pale brew". [36] Approximately 15,000 cases were released in North America in December 2010 at a suggested retail price of $20 per 750 mL bottle, [37] Marketed towards drinkers who would rather toast with beer than Champagne on New Year's Eve, Infinium is described by the brewers as "the first new beer style created under the Reinheitsgebot in over a hundred years". [36] [38]

Samuel Adams Brewing the American Dream Edit

In 2008, Jim Koch created the Brewing the American Dream program. [39] As of 2015, the company has helped more than 4,000 entrepreneurs and together with their lending partner, Accion, made close to 400 loans totaling $400 million. [39]

2008 Hops shortage Edit

In early 2008, amidst a worldwide shortage of hops—a key ingredient in beer—Boston Beer Company agreed to sell 20,000 pounds of its hops, at cost, to craft brewers throughout the United States. The company selected 108 craft brewers to divide the 20,000 pounds they had spare. [40] [41]

Samuel Adams shared their hops again in June 2012. [40]

LongShot American Homebrew Competition Edit

Created in 1996, the Samuel Adams LongShot American Homebrew Competition is an annual competition among amateur homebrewers. Homebrewers submit their brew to a series of judging and taste tests with the chance to see their creation in larger-scale production and sold on store shelves as part of a Samuel Adams mixed 6-pack the following year. [42]

Starting in the 2018 season, Boston Beer Company's Samuel Adams became the official beer of the Boston Red Sox, replacing Budweiser. [43] The eight-year deal will last through the 2025 season and include signage and a Sam roof deck. [43] The agreement also allows Boston Beer to use the Red Sox Logo for marketing purposes, run Red Sox related contests with tickets to games. [44]

Since 1990, the company has produced a seasonal fruit beer labeled "Cranberry Lambic". "Lambic" describes a spontaneously fermented beer generally produced in Brussels or the nearby Pajottenland region, [45] and the Samuel Adams product is not spontaneously fermented, consumers and brewers charged that "Cranberry Lambic" was mislabeled [46] and could cause consumer confusion. Michael Jackson, a leading beer critic, called it "a misleading name". [47] Grant Wood, Senior Brewing Manager at Boston Beer, defended the name, saying, "I wouldn't consider it mislabeling. Whenever I have served the Cranberry Lambic, I have always been really up front about it. Is it a true lambic made in that region in Belgium? No. Does it taste like one? Yes. So it's sort of our homage to the style without the pain and agony of it." [46]

From 2000-2002, the company sponsored a radio show on WNEW in New York called "Opie & Anthony". The hosts created a promotion called "Sex for Sam", in which Opie and Anthony encouraged couples to have sex in notable public places in New York City. On August 15, 2002, a Virginia couple was charged with public lewdness after attempting to have sex in a vestibule at St. Patrick's Cathedral this led to the firing of the radio hosts a week later. [48]

In October 2007, in an incident referred to by The Wall Street Journal as "Sam Adams v. Sam Adams", [49] the Boston Beer Company demanded that control of the domain names "samadamsformayor.com" and "mayorsamadams.com" be turned over to the company. [50] The domains had been purchased by an employee of the Portland, Oregon radio station NewsRadio 1190 KEX for the campaign of Portland mayoral candidate, Sam Adams. In a cease-and-desist letter, [50] the company expressed concern that consumers might confuse the mayoral candidate with their beer. In an interview with the Associated Press the company said it was willing to discuss Adams' use of his name on his Web sites, "probably for the length of the time the election is being held". [51]

In April 2008, the Boston Beer Company issued its first product recall because of potential defects found in certain 12-US-fluid-ounce (350 ml) glass bottles manufactured by a third-party supplier which, at the time, supplied about a quarter of the bottles the Boston Beer Company used. [52] The Boston Beer Company stated that they believed fewer than 1% of bottles from the supplier could contain small pieces of glass and issued a recall for the safety of consumers. There were no reports of injuries. [53] News of the recall led to shares of the company temporarily dropping by more than 3%. [54]

On July 4, 2013, a video commercial for Sam Adams beer was rolled out on the July 4th holiday that created controversy over an omitted phrase. The manufacturer decided to leave out "endowed by their creator" in its invocation of the Declaration of Independence which outraged critics. But Sam Adams said they were just following trade association rules. The company said in a statement: "The Beer Institute Advertising Code says, 'Beer advertising and marketing materials should not include religion or religious themes.' We agree with that and try to adhere to these guidelines." [55]

In 2018, the company pushed for changes to the definition of "craft brewery" in order to accommodate a continuing shift away from beer-only operations toward other brewed products including ciders. [56]

In 2020, for the first time ever the company removed the popular Old Fezziwig ale from their Winter Classics Variety Pack. [57]


Is There Now An Opportunity In The Boston Beer Company, Inc. (NYSE:SAM)?

The Boston Beer Company, Inc. (NYSE:SAM) received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Boston Beer Company’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

What's the opportunity in Boston Beer Company?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.55% above my intrinsic value, which means if you buy Boston Beer Company today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $1140.65, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Boston Beer Company has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Boston Beer Company generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Boston Beer Company's earnings over the next few years are expected to increase by 93%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? SAM’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on SAM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Boston Beer Company.

If you are no longer interested in Boston Beer Company, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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(Bloomberg) -- Felix Dian is in fighting spirits after this week’s crypto meltdown.Like many pros, the former Morgan Stanley trader says Bitcoin’s volatility actually shows why hedge funds are in the digital-currency game: To ride boom and bust cycles with diversified bets so clients don’t get killed at times like this.Something is working. His $80 million crypto-focused fund at MVPQ Capital is up 14% in May and has more than tripled in value this year. In contrast, Bitcoin has plunged almost 30% this month, cutting the advance for 2021 to 42%.“We had kept dry powder,” he said in an interview from London. He took advantage of Wednesday’s price collapse and bought Bitcoin when it was trading around $35,000.Crypto-Crash Autopsy Shows Billions Erased in Flash LiquidationsNot everyone’s been so lucky. Scores have seen their fortunes dashed this week in a cascade of selling across crypto markets. Investors spent some $410 billion buying up Bitcoin during this bull market, according to data from Chainalysis. When prices sank to $36,000 this week, $300 billion of those positions were at a loss.It’s left money managers wrestling with whether the digital currency, which is coming under new regulatory scrutiny in the U.S. and China, still has the makings of a serious asset class or will remain nothing more than a speculative bubble.Bitcoin hovered around $40,000 on Friday, trading up 1% as of 7:15 a.m. in New York. The token has lost 35% since hitting an all-time high of $63,000 in April.Charles Erith, who worked for 24 years in Asian emerging markets before jumping to crypto, said the speculative froth was flushed out this week. He bought Bitcoin as prices were plunging.“At $35,000, we felt it’s a reasonable level at which to be adding,” said Erith, who runs ByteTree Asset Management in London. “It’s obviously not regulated and it’s a very young asset, but I don’t think this is going to be a revisit of 2018.”Data from research firm Chainalysis shows professional investors used the crash as an opportunity to start buying at cheap levels, helping put a floor under the market. Big investors bought 34,000 Bitcoin on Tuesday and Wednesday after reducing holdings by as much as 51,000 bitcoin in the last two weeks, according to data from Chainalysis.“People that were borrowing money to invest, they were wiped from the system,” said Kyle Davies, co-founder at Three Arrows Capital in Singapore. His firm bought more Bitcoin and Ether as prices of the tokens tumbled this week.“Every time we see massive liquidation is a chance to buy,” he added. “I wouldn’t be surprised if Bitcoin and Ethereum retrace the entire drop in a week.”Over in Paris, Loan Venkatapen, founder of Blocklabs Capital Management, blames the recent rout on over-leveraged retail investors but says blockchain and the related technologies “are here to stay.”Unlike Davies, Venkatapen avoided Bitcoin, but bought Ether, Solana and other assets connected with the decentralized finance movement as they sold off.“Bitcoin is not dying, but we expect productive blockchain assets such as Ethereum or Solana to challenge Bitcoin dominance in the coming months,” he said.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Giant New Iron Ore Mine May Aid China’s Push to Cool Prices

(Bloomberg) -- BHP Group’s start up of production at its $3.6 billion South Flank project in Australia -- combined with existing operations at the site -- will create the world’s biggest iron ore hub. It may also help temporarily cool a hot market.Iron ore futures are trading below $200 a ton after China’s cabinet called for tougher oversight of commodity markets and protection for consumers from soaring prices. While South Flank was a replacement mine, the announcement of a big mine coming on stream can add short-term to negative market talk, according to Peter O’Connor, mining analyst at Shaw & Partners Ltd.Commodities have tumbled as international markets are gripped by inflation fears and the authorities in Beijing continue to try to jawbone and manage prices lower. China’s cabinet expressed concerns Wednesday about the surge in prices for a second week in row, calling for more effort to curb “unreasonable” gains and prevent any impact on consumer prices. The meeting, chaired by Premier Li Keqiang, also called for a crackdown on speculation and hoarding.Against this backdrop, where steel margins were getting compressed in China and Li was trying to talk commodities down, “it weighs on that narrative as opposed to really weighing on the market,” O’Connor said. “But when you get these sort of extremes -- that subjective narrative can be a key driver.”South Flank has been built to replace the depleting Yandi mine -- and together with the existing Mining Area C -- will form a hub with annual production of 145 million tons a year. South Flank’s higher quality product will also lift the average iron ore grade across BHP’s Pilbara operations. In the short-term, there was potential for a squeeze higher in BHP’s ore exports as South Flank and Yandi operated in tandem, although the overall physical impact on the market was likely to be small, said O’Connor.The start of production of 80 million tons a year at South Flank, matching Yandi, comes at a time when top exporters Australia and Brazil have been challenged in meeting strong demand from Chinese steel mills. Pilbara shipments were down 6% in April compared to the year-ago period, while Brazil’s exports were flat, according to Bloomberg Intelligence. BHP’s current guidance is for annual production at the upper end of its range of 276-286 million tons.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Judge in Texas lawsuit against Google refuses to move case to California

WASHINGTON (Reuters) -A Texas judge hearing a state antitrust lawsuit against Alphabet Inc's Google denied on Thursday a request for the case to be moved to California, where the company is fighting similar lawsuits. Google had asked for the case to be moved for several reasons, including that its headquarters is in California, as are many of the witnesses who would likely be called. Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas, however, disagreed that that and other arguments made by Google were adequate reason to change venue.

Trudeau Tightens Up Mortgages After Macklem Sounds Housing Alarm

(Bloomberg) -- Canadian officials escalated efforts to cool the nation’s booming housing market, moving ahead with tighter mortgage qualification rules after the central bank issued a fresh warning against buyers taking on too much debt.Prime Minister Justin Trudeau’s government set a new benchmark interest rate on Thursday afternoon to determine whether people can qualify for mortgages that are insured by Canada’s housing agency. The move matches an April decision by the nation’s banking regulator to do the same for uninsured mortgages.The regulator -- the Office of the Superintendent of Financial Institutions -- announced earlier Thursday it would implement its new rules June 1.Those steps coincided with a stern warning from Bank of Canada Governor Tiff Macklem in the morning cautioning that Canadians should neither assume interest rates will remain at historic lows nor expect recent sharp gains in home prices to continue.“It is vitally important that homeownership remain within reach for Canadians,” Finance Minister Chrystia Freeland said in a statement.The moves come amid a surge in housing prices that’s raising concern among policy makers and economists. Cheap mortgages and new remote-working conditions have spurred a frenzy of demand for more spacious homes, with house hunters bidding up prices across the country.Canadians are so alarmed by the red-hot housing that nearly half the respondents in a Nanos Research Group poll for Bloomberg News say they’d like to see the Bank of Canada raise borrowing costs to curb demand for real estate and stabilize prices.Still, the measures announced Thursday are seen as incremental steps rather than representing a fundamental shift in policy.With the changes, home buyers will have to show they can afford a minimum rate of 5.25%. The current threshold, based on posted rates of Canada’s six largest lenders, is 4.79%. Economists have been estimating the tighter qualification restrictions would reduce the buying power of households by about 5%.The changes will have little impact on current housing price dynamics, according to Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce.“This is not a game changer by any stretch of the imagination and it was highly expected,” Tal said by phone from Toronto.The measures from the government and the regulator came only hours after the Bank of Canada released its annual financial stability report, which highlighted the growing vulnerabilities associated with overleveraged households and speculative housing activity. It flagged three urban markets -- Toronto, Hamilton and Montreal -- as showing excess “exuberance,” with the national capital of Ottawa on the cusp of crossing that threshold.‘Not Normal”At a press conference, Macklem said some people have taken on “significantly” more debt, with many carrying very large mortgages relative to income. Borrowers and lenders need to understand that interest rates won’t always be at historic lows, and home buyers won’t be able to rely on rising values, he said.“It is important to understand that the recent rapid increases in home prices are not normal,” Macklem said. “Counting on ever higher house prices to build home equity that can be used to refinance mortgages in the future is a bad idea.”Outside of the warnings Thursday, it’s not clear how much the central bank can do to cool the market.Growing household vulnerabilities could give policy makers more reason to consider raising borrowing costs, for example, but higher rates would also inflate risks -- such as slow growth or a price correction. Macklem’s next interest-rate decision is due June 9 and the Bank of Canada has said it won’t consider raising its 0.25% benchmark rate until he economy is recovers fully from the Covid-19 pandemic.The Bank of Canada’s financial system review did find that Canada’s lenders could absorb a significant amount of losses in the case of another shock. The central bank said household debt and housing market vulnerabilities probably don’t pose a significant systemic threat to bank solvency, even though they could undermine future growth.“We have to look at the whole economy,” Macklem said at the press conference. “There are important parts of the economy that remain very weak, and the economy needs our support.”(Updates with context throughout.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Investors shun tech, rush for inflation protection - BofA

LONDON (Reuters) -Investors pumped money into inflation protection and dumped some tech stocks, BofA's weekly fund flow data showed on Friday, as U.S. Federal Reserve policymakers hinted at discussing tapering of government bond purchases "at some point". Gold funds attracted $1.3 billion, BofA said. Tech stocks are particularly sensitive to rising interest rate expectations because their value rests heavily on future earnings, which are discounted more deeply when rates go up.

SEC approves Nasdaq proposal to allow IPO alternative to raise funds

In a filing https://bit.ly/3vc3jHV dated May 19, the SEC said Nasdaq's proposed rule change was consistent with the regulator's rules and regulations and could be beneficial to investors as an alternative to a traditional initial public offering. The move is a big breakthrough for the exchange operator that has been pushing for an alternative for companies to raise money. Reuters had reported in August https://www.reuters.com/article/us-nasdaq-direct-listing-exclusive-idUSKBN25L1BC that Nasdaq had filed with the SEC to change its rules to enable companies that debut on the stock market through a direct listing to raise capital.

Gold Weekly Price Forecast – Gold Markets Break Down Trendline

Gold markets have rallied quite nicely during the trading week, breaking above the downtrend line that I have drawn on the chart and even approached the $1800 level.

CANADA FX DEBT-Canadian dollar nears 6-year high as inflation concerns ease

* Canadian dollar strengthens 0.2% against the greenback * For the week, the loonie is on track to gain 0.6% * Canadian retail sales rise 3.6% in March * Price of U.S. oil rises 1.9% TORONTO, May 21 (Reuters) - The Canadian dollar rose against its U.S. counterpart on Friday as investor worries about U.S. inflation receded and domestic data showed retail sales climbing in March, with the loonie moving closer to a six-year high notched earlier in the week. Canadian retail sales rose 3.6% in March from February, surpassing estimates for a 2.3% increase, data from Statistics Canada showed. World stock markets edged higher after a volatile week, taking their lead from a stronger Wall Street as U.S. business activity data tempered inflation fears.

Away From the Big Crypto Blaze, Another Market Tension Eases

(Bloomberg) -- A bear market in Bitcoin. A bull market in Bitcoin. Taper talk, or talk thereof. The biggest pop for meme stocks of the season. A lot just happened, and yet when the history of this week is written, it’s possible a much quieter development will be the lead.After intensifying earlier this month, inflation anxiety appears to be easing. Rates on 10-year breakevens dropped by the most on a weekly basis since September, capping any rise in Treasury yields. Meanwhile, a surge in raw materials continued to sputter, with the Bloomberg Commodity Spot Index sinking for a second straight week.That was enough to comfort investors in big tech. The Nasdaq 100 posted its first weekly gain in over a month, after being rattled by warnings that soaring prices would eat into future cash flows and shine a harsh light on expensive valuations. And while minutes from the Federal Reserve’s April meeting signaled an openness to discussing a scaling back of asset purchases, comments that it would “likely be some time” until the economy recovers to that point helped prevent any knee-jerk reactions.“Inflation is really only a problem for stocks if it’s going to bring the Fed off the sidelines,” said Brian Nick, chief investment strategist at Nuveen. “If you see interest rates falling, if you see inflation expectations receding, if you see the Fed continuing to come out with overall dovish minutes, it tends to be a pretty friendly environment for tech.”Whether or not the U.S. economy has seen peak growth, a series of weaker-than-expected reports have helped quell inflation fears. Last month’s housing starts were lower than anticipated, while the pace of mortgage applications slowed from the prior month. On Thursday, data from the Philadelphia Fed showed manufacturing activity in the region eased in May from a 48-year high the prior month.As a result, Citigroup Inc.’s economic surprise gauge -- which measures the magnitude to which reports either beat or miss forecasts -- briefly dropped into negative territory for the first time since June 2020 this week.The Nasdaq 100 held onto a 0.1% gain this week as inflation expectations ebbed, snapping a four-week losing streak. Tech eked out a gain as cryptocurrencies ricocheted, with Bitcoin dropping 12% on Friday alone after China reiterated its intent to to crack down on mining.Still, some warn that it’s too early to signal the all-clear on inflation risks. Anxiety around price pressures in the coming months should be a boon for defensive sectors and particularly favor financials, while eating into growth stocks with duration-sensitive cash flows, according to State Street Global Advisors.“Because there’s so much disagreement on how inflation may unfold, that disagreement in the market will inevitably lead to volatility,” said Olivia Engel, chief investment officer of SSGA’s active quantitative equity team. “If you look at the aggregate market, it’s hiding some of that market rotation -- that’s where you can see much bigger moves.”(Updates Bitcoin price in seventh paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Wealth Fund That Quadrupled Profit Now Pivots With Bet on Europe

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.One of Africa’s largest sovereign wealth funds rode the wave of U.S. technology stocks to a banner 2020. Now, it’s betting Europe will play catch-up.The Nigerian Sovereign Investment Authority, fresh off a 51% surge in assets that took the fund above $2 billion, is boosting its exposure to European stocks and will add some Japanese equities, Chief Executive Officer Uche Orji said in an interview. The Goldman Sachs Group Inc. alumnus sees opportunity as Europe begins to open up from Covid lockdowns.“Last year, Europe underperformed America big time” as investors moved funds to technology companies profiting from the shift to online services at the onset of the coronavirus pandemic, Orji said. As the global economy reopens, countries with broader industrial bases and services such as Europe “will become more interesting,” he said.The Euro Stoxx 50 equity benchmark has climbed almost 11% this year, buoyed by expectations of a rapid recovery as vaccinations against the coronavirus progress while fiscal and monetary policies across the region remain loose. It’s outperformed both the S&P 500 Index and MSCI All Countries World Index, which have risen 9.6% and 7.5% respectively in the year-to-date.Expanding FootprintThe NSIA has $2.1 billion of assets under management. About a third of that amount is held by its Future Generations Fund, which buys equities in developed and emerging markets. The authority had 25% of the FGF invested in stocks last year, with the “bulk” in the U.S., while European stocks accounted for less than 4%, Orji said.“We are just going to add more capital to expand our footprints in Europe and Japan, but Europe in particular is an area where we have not had a big presence,” he said.Orji, 51, has more than two decades of experience in international banking, with an MBA from Harvard Business School. Prior to his appointment as CEO of the NSIA in 2012, he’s had stints at Goldman Sachs Asset Management LP, JPMorgan Chase & Co. and UBS Securities.The NSIA reported a four-fold increase in profit last year to 160 billion naira ($390 million). Returns this year will likely trail 2020 as a rally in global equities eases up and as it invests in infrastructure projects that can take longer to generate income, Orji said.The authority plans to establish a $200 million fund that builds health-care facilities to treat diseases including cancer and orthopedics. Africa’s most populous country has for decades lacked adequate investment in health care, prompting citizens including President Muhammadu Buhari to seek treatment abroad.The NSIA plans to finance the health-care projects with co-investors, Orji said, without providing more details.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

UPDATE 4-Apple App Store profits look ɽisproportionate,' U.S. judge tells CEO Cook

A federal judge on Friday grilled Apple Inc Chief Executive Tim Cook over whether the iPhone maker's App Store profits from developers such as "Fortnite" maker Epic Games are justified and whether Apple faces any real competitive pressure to change its ways. Cook testified for more than two hours in Oakland, California, as the closing witness in Apple's defense against Epic's charges that the iPhone maker's App Store controls and commissions have created a monopoly that Apple illegally abuses.

Nvidia sets 4-for-1 stock split, shares rise

The company's stock, which was last up at over $600 in premarket trading, has gained nearly 12% this year after its value more than doubled in 2020. Stock splits can potentially attract retail investors who make small trades. Santa Clara, California-based Nvidia said stock holders of record on July 21 would receive dividend of three additional shares after the close of trading on July 19, with the stock trading on a split-adjusted basis beginning July 20.

Hong Kong to restrict crypto exchanges to professional investors

HONG KONG (Reuters) -Cryptocurrency exchanges operating in Hong Kong will have to be licenced by the city's markets regulator and will only be allowed to provide services to professional investors, according to government proposals published on Friday. Investor protection and preventing money laundering are particular concerns. Dozens of cryptocurrency exchanges operate in Hong Kong, including some of the world's largest.



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