US: Boston Beer Co posts YTD profits rise as volumes jump
- YTD net profits up 23% to US$52.3m
- Net sales up 25% to $533.7m
- Operating profits up 22% to $84m
- Q3 profits up 24% to $25.7m
Boston Beer increased Q3 shipments by 29%
The Boston Beer Co has posted a jump in year-to-date profits as an increase in marketing spend failed to offset higher sales and volumes.
Net profits were up 23% to US$52.3m in the 39 weeks to 29 September, the Samuel Adams brewer said yesterday (30 October). Net sales climbed by 25% to $533.7m over the same period while operating profits rose by 22% to $84m.
Third-quarter results were similar, with net profits for the 13-week period up by 24% to $25.7m. Net sales jumped by 30% to $216.4m while operating profits increased by 27% to $42.2m.
Boston Beer attributed the profits rise to an increase in volumes that in the third-quarter saw an extra 993,000 barrels - a 29% increase - sent out compared to the same 13-week period last year. YTD volumes were up by 23%.
New brand investment saw advertising, promotional and selling and customer program and incentive costs increase by a combined 25%, or $11.8m, in the third quarter, the company said. In YTD, those costs were up by $28m.
“We believe that the strength of our main brands is reflective of strong sales execution and our increased investments in media, local marketing and point of sale, and the efforts of our increased sales force,” Boston Beer CEO Martin Roper said. “We have raised our expectations for 2013 full-year depletions growth to between 21% and 24% to reflect the current trends.”
Boston Beer got the year off to a poor start as Q1 profits dropped on higher advertising costs. However, in first-half results, released in August, profits growth was back in line with sales increases.
The company yesterday admitted that sales from its craft beer incubator, Alchemy & Science, “have not been significant” and are not yet likely to cover investment in the project.
Alchemy & Science, which houses brands such as Angel City Brewery, Traveler Beer Company and the Just Beer Project, was behind Boston Beer's purchase of the Coney Island brand from Shmaltz Brewing Company in August.
Boston Beer's share price ended trading yesterday up 0.8% at $247.70.
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