• Net profits YTD fall by 11% to $42.6m
  • Net sales up by 15% to $427.2m
  • Operating profits drop by 12% to $68.6m
  • FY EPS estimated at $3.80-$4.20 
Volumes and sales increased despite a despite a further slide in profits

Volumes and sales increased despite a despite a further slide in profits

The Boston Beer Company has reported another slide in profits, despite a strong Q3, as an increase in advertising spend and new sales staff took their toll in the year-to-date.  

Net profits in the nine months to the end of September fell by 11% to $42.6m, the Samuel Adams brewer said late yesterday (1 November). However, sales were up 15% year-on-year to $427.2m, with volumes up by 11% to 2.01m barrels. 

Operating profits in the nine-month period fell by 12% to $68.6m. The performance represents an improvement on the group's first-half when operating profits fell 31.6% to $35.2m. 

In Q3, Boston Beer Co saw net profits leap by 27% to $20.8m, as operating profits jumped by 26% to $33m. Net sales rose by 23% to $166.4m in the three-month period, thanks in part to a 17.7% increase in volumes to 778,000 barrles. 

On the YTD performance, the group pointed to a rise in “sales personnel, increased investments in advertising and local marketing and increased costs of freight to wholesalers”. 

It added: “General and administrative expenses increased by $4.9m the same period in 2011, primarily due to increases in salary and benefit costs and alchemy & science start-up costs.” 

Martin Roper, president & CEO, said: “We have increased the investment levels in our sales force and our support behind our Samuel Adams brand." 

He added: "We are making appropriate investments in brand-building activities and capital improvements in our brewing and packaging capabilities to position us well for long-term growth and continued efficiency gains. We are prepared to forsake the lost earnings that may result from these investments in the short term."

Looking ahead, the group said it expects FY earnings per diluted share to be between $3.80 and $4.20 for the 52-week period to the end of December. 

To view the company's full announcement, click here.