Today's surge in Boston Beer Company's stock price.
Boston Beer, the craft brewer and malt beverage maker, saw a surge today as shares broke out, following the company's fourth-quarter earnings report. Despite continuing challenges, Boston Beer showed signs of turning a corner. As of 10:39 a.m. ET, the stock was up 4.7% on the positive news.
Stepping Up the Game
The fourth-quarter trends showed improvement over earlier periods in the year. Depletions, which indicate how much beer retailers actually sell in a given period, remained flat. Shipments, however, dipped 0.5%, indicating steady consumer-level volume trends. Revenue for the quarter reached $402.3 million, an incremental 2.2% increase, beating analyst estimates of $389.2 million.
Gross margin bounced back with a 230-basis-point surge to 39.9%, attributable to higher prices and procurement savings. Although Truly Hard Seltzer sales continued to decline, the drop was offset by growth in other popular brands, such as Twisted Tea, Hard Mountain Dew, and Sun Cruiser.
Other operating costs—including advertising, promotions, and general and administrative expenses—increased during the quarter. However, Boston Beer ended it with an adjusted per-share loss of $1.68, compared to a $1.49 per-share loss a year ago. This loss was slightly more than anticipated, with consensus figures placing it at $1.33 per share. Keep in mind that Boston Beer's business is seasonal, with summer months typically yielding better profits.
CEO Michael Spillane expressed positivity, noting that "the fourth quarter provided a solid finish to 2024 with flat depletions, gross margin expansion, and strong cash generation." The company is now entering 2025 with a renewed focus on end-to-end execution, displaying progress in a dynamic market environment.
Where Boston Beer is Headed
Looking ahead to 2025, depletion and shipment guidance suggest either minimal declines or growth in the single digits. Revenue growth is projected at 1%-2%, thanks to anticipated price increases. As for earnings, the company aims for a GAAP EPS ranging from $8 to $10.50. This estimate falls slightly below 2024's total of $9.43 and is also below analyst expectations of $11.30. However, this could be indicative of a cautious approach.
The stock's gains, despite the conservative guidance, are unexpected but could provide a necessary floor for Boston Beer. While this isn't a compelling reason to buy, it could bolster investor confidence.
The improved fourth-quarter earnings report led to a 4.7% increase in Boston Beer's stock price, indicating a positive sentiment in the market. Boston Beer's gross margin saw a significant boost, with a 230-basis-point surge to 39.9%, primarily due to higher prices and procurement savings. Despite the decline in Truly Hard Seltzer sales, the loss was partially offset by growth in other popular brands, demonstrating a diversification strategy in the finance sector.
