Boston Beer Co drives margins to boost YTD sales, profits
- YTD net profits up 15% to US$82.2m
- Net sales climb 8% to $794.2m
- Operating profits increase 13% to $129.8m
- YTD shipment volumes up 6%
- Q3 net profits edge up 2% to $38.6m
- Net sales up 9% to $293m
- Operating profits flat at $60.8m
- Q3 shipment volumes climb 4%
Boston Beer said there was increased competition for Samuel Adams
Boston Beer Co increased both margins and volumes to post a nine-month sales and profits jump, but increased competition for Samuel Adams saw it cut back on its full-year outlook.
Volumes were up by 6% in the 39 weeks ended 26 September, while gross margins rose from 52.1% to 52.8%. Overall, net sales climbed by 8% to US$794.2m while net profits leapt by 15% to $82.2m.
Third-quarter figures followed the same pattern, with margin and volumes growth driving solid sales and profits increases.
Despite the performance, Boston Beer founder Jim Koch said the company's Samuel Adams beer brand was under increasing pressure. The company reduced its estimated FY depletions growth to between 3% and 6%, down from an already lowered estimate of 6% to 9%.
“While our total growth is testament to our strategy of a diversified brand portfolio, our Samuel Adams trends appear to represent a very competitive category, where drinkers are seeing greatly increased choices and established brands are being impacted,” Koch said.
He also said the cider category, which Boston Beer dominates in the US with its Angry Orchard brand, was slowing. His comments support those from C&C Group management yesterday, who told just-drinks major breweries in the US had seen cider sales ease.
Koch said he remained confident in the company's long-term outlook, with new launches in Q4 including the national draught launch of Rebel Grapefruit, a grapefruit IPA featuring Mosaic hops, and the introduction of Rebel Raw, an unfiltered double IPA. The company will also introduce the Samuel Adams Nitro series in the first quarter of next year.
Outlook for 2016
- Depletions and shipments percentage growth of mid to high single digits
- National price increases of between 1% and 2%
- Gross margins of between 52% and 54%
To read the company's full results, click here.
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