just On Call - Boston Beer Co remains cautious despite strong Q1
Boston Beer Co is refusing to get carried away by a strong first quarter
Boston Beer Co has resisted raising its full-year profits outlook as the threat of major players launching new ciders and investing in other brands means “uncertainty” for the group, according to its CEO.
The brewer yesterday (30 April) reported a sharp rise in first-quarter profits and sales, helped by a strong performance from its core brands Samuel Adams, Angry Orchard cider and FMB brand Twisted Tea. The firm also benefited in the quarter from the roll-out of Samuel Adams Rebel IPA in the US.
However, the group, the US's biggest craft brewer by volume, maintained its 2014 fiscal outlook of US$6 to $6.40 per diluted share.
“It’s our smallest quarter and frankly, we don’t have a really great read on everything we are doing ... and I would put Rebel in that category, although ... we’re very pleased,” Boston's CEO, Martin Roper told analysts on a conference call.
“But ... there is a lot of uncertainty as we look at what’s going on in the category. W’ve got two or three major players pushing brands into the cider category or reinvesting behind existing brands. We don’t really know how it’s going to go; it’s way too early to tell.”
Last month, Anheuser-Busch InBev launched a new cider, Johnny Appleseed, in the US, while its rival, MillerCoors, also began shipping a new brand, Smith & Forge Hard Cider.
But, earlier, Roper said: “Given the opportunities that we see, we expect a continued high level of brand investment and capital 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.”
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