Why Samuel Adams Brand Parent Boston Beer Shares Are Plunging Today

The Boston Beer Company, Inc. SAM shares are trading lower after the company reported worse-than-expected fourth-quarter FY23 results.

Net revenue decreased 12.0% Y/Y to $393.7 million, missing the consensus of $413.8 million. Net revenue decreased 3.1% Y/Y on a 13-week comparable basis. A $5.1 million international sales tax adjustment negatively impacted the fourth-quarter revenue.

Depletions decreased 9% Y/Y, and shipments plummeted 12.2% Y/Y in the quarter.

Gross margin expanded 60 basis points Y/Y to 37.6% in the quarter. The company reported an EPS loss of $(1.49), missing the consensus of $(0.25).

As of December 30, 2023, the company held cash of $298.5 million and no debt.

Boston Beer reported operating cash flow of $265 million in the year. The company repurchased $128.5 million in shares in the year.

FY24 Outlook: The company expects Depletions and Shipments to be down low single-digit to up low single digits, a price increase of 1%-2%, and EPS of $7.00 to $11.00 (vs. cons. $11.39).

Apart from this, Boston Beer disclosed the retirement of Dave Burwick from the post of President and Chief Executive Officer and member of the Board of Directors, effective April 1, 2024. 

The company announced the appointment of Michael Spillane to assume the role effective the same day.

Price Action: SAM shares are down 13.8% at $319.13 on the last check Wednesday. 

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