US: Boston Beer Co setting sights on long-term growth - analyst
The Boston Beer Co brews Samuel Adams craft beer
The Boston Beer Co's (SAM) poor quarterly showings should not alarm investors as the craft brewer is set on the long game, according to an analyst.
The Samuel Adams brewer missed most expectations in first-half results released yesterday (1 Aug), according to a note from analysts CLSA today. The analyst's estimate of US$1.39 in Q2 earnings per share far overshot Boston Beer's reported $1.07.
But the miss had less to do with underlying demand than investments made to improve business, CLSA said.
“We continue to view SAM as a unique play on the secular growth of the craft beer segment, and Q2 earnings do not change our long-term view,” it said.
Meanwhile, CLSA predicted that a volumes drag caused by Boston Beer's Freshest Beer Program will partially reverse in the second half of the year because inventories are lower in the winter.
“Grain costs are also expected to be contained through year-end due to forward buying,” the analysts said.
CLSA also said Boston Beer is strong enough to withstand any problems in the autumn when retailers reset shelf space.
“Whatever those changes may be, we believe Boston Beer's leadership position in craft and its outsized sales force help protect its position regardless,” it said.
- Diageo NA head on Trump, Millennials, Bourbon
- Has Millennial-mania drowned out elder consumers?
- Interview - Loch Lomond GTR head Andre de Almeida
- Absolut and Smirnoff's conflicting Millennial view
- Brown-Forman's H1 performance by region, brand
- Coca-Cola CEO Muhtar Kent set to stand down
- Diageo wine assets integration head to leave TWE
- Brown-Forman's barrel sales take Scotch hit
- Absolut not "sufficiently focussed" on Millennials
- Angostura places CEO on administrative leave
- Luxury Alcoholic Drinks: The Spirit of Premiumisation
- Global gin insights - market forecasts, product innovation and consumer trends
- Global Wine Market 2016-2020
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends