Higher beer prices boosted sales for US-based brewer Boston Beer Co in 2009, while margin expansion held up profits against higher costs.
Net profits for the 12 months to the end of December reached US$31m, compared to $8m in 2008, Boston Beer said yesterday (9 March).
While most of the sales increase is accounted for by a $23m charge on a product recall in 2008, the brewer also reported a 5% expansion in gross margins and lower advertising spend in 2009.
Price rises on beer enabled net sales to rise to $453.4m, against $436.3m in the previous year. Beer volume sales slipped by 1% during the year, however, reflecting weaker consumer demand in the US beer market as a whole.
“Since the end of the first half of 2009 we have seen an improvement in the trends of our brands,” said Boston Beer president and CEO Martin Roper.
Echoing comments from other brewers on the US market, Roper said that 2010 will remain difficult for beer.
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By GlobalData“The company believes that the current competitive pricing environment is very challenging and has reduced its expectations for revenue per barrel increases,” the group said, adding that there will only be room for “minor price optimisations”.
However, it predicted that diluted earnings per share for 2010 will be within a range of $2.35 and $2.65, compared to $2.17 in 2009. Margins should also continue to expand, the firm said.
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