• Q1 net profits plunge by 36.8% to US$3.9m
  • Sales increase by 8.7% to 102.2m
  • Operating profits drop by 36% to $6.6m
  • Marketing investment drags profits south
Increased marketing spend on Samuel Adams hampered Boston Beer Companys Q1 profits

Increased marketing spend on Samuel Adams hampered Boston Beer Company's Q1 profits

The Boston Beer Company has seen its Q1 profits hammered by “increased investments in advertising, promotional and selling expenses”, which helped increase sales in the period.

The US craft brewer, which owns the Samuel Adams Boston Lager brand, said yesterday (5 May) that net profits for the three months to the end of March came in 36.8% down on a year earlier, at US$3.9m. Sales rose, however, by 8.7% to $102.2m and by 10% in volume terms to 502 barrels. Operating profits struggled, falling by 36% to $6.6m.

The company blamed its depressed profits on its advertising, promotional and selling expenses, which increased by 22% for the quarter, “primarily due to planned increased investments behind the company's brands”.

The brewer maintained its projection of 2011 earnings per diluted share of between $3.45 and $3.95. “While the company is currently concerned about significant cost pressure from fuel price increases and their impact on freight costs, package material and brewery operating costs,” it said, “it believes that it is too early in the year to assess the extent to which the increased fuel costs may be offset by operating efficiencies, pricing or volume growth, or the possibility that these pressures may subside.”

To read Boston Beer Company's official release, click here.