Boston Beer Earnings Hurt by Increased Competition From Craft Brewers
April 21 2016 - 6:40PM
Dow Jones News
Boston Beer Co. on Thursday said its earnings were nearly cut in
half in the first three months of the year as the maker of Samuel
Adams Boston Lager faces increased competition from brewers of
craft beers.
Shares of Boston Beer, down 34% the past year, slipped 11%, to
$153.75, in after-hours trading on the weaker-than-expected results
and the company's reduced forecast.
"We believe Samuel Adams has lost share due to the increased
competition and continued growth of drinker interest in variety and
innovation," said Jim Koch, co-founder of the company.
Craft breweries are springing up at a rate of nearly two a day,
according to the Brewers Association, an organization which
represents over 3,000 small-scale beer producers.
As these smaller-scale brewers snatch up shelf space and sales,
Boston Beer has become a victim of its own success, too big and
familiar to be considered by many as an authentic craft brewer, but
without expanding enough to have the cost advantages of bigger
brewers.
To compete with its smaller-scale competitors, the company has
recently launched more specialized brews to help reclaim market
share. In the latest quarter, the company released Samuel Adams
Nitro White Ale, Samuel Adams Nitro IPA, Samuel Adams Nitro Coffee
Stout and Samuel Adams Rebel Grapefruit IPA.
Overall, for the first quarter ended March 26, Boston Beer
reported a profit of $7 million, or 53 cents a share, down from
$13.7 million, or $1 a share, a year earlier.
Net revenue slipped 5.4%, to $188.8 million. Core shipment
volume decreased 6%, to about 830,000 barrels.
Analysts surveyed by Thomson Reuters had projected profit of 96
cents a share on $198 million in revenue.
Following the weaker-than-expected results, the brewer cut its
annual earnings guidance to an estimated range between $6.50 and
$7.30 from a previous range of $7.60 to $8.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
April 21, 2016 18:25 ET (22:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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