Earnings preview: Will Boston Beer Co (SAM) fizz up with its latest results?

Boston Beer Co is on the brink of unveiling its Q4 earnings, projecting an adjusted EPS of $(0.29) on revenues of $413.57 million, marking an approximate 8% year-over-year decline. The spotlight is on SAM following a previous quarter sell-off due to missed EPS forecasts and a slow uptick in its Truly Hard Seltzer brand. The upcoming report will critically assess these areas.

SAM's track record shows variability in surpassing earnings expectations, with misses in six out of the last eight quarters. The performance of Truly Hard Seltzer has notably affected SAM's recent financial health. Management's commitment to revitalizing Twisted Tea and Truly, alongside its Beyond Beer ventures, aims for sustained growth. This quarter's results will reveal if the modifications to Truly have sparked a positive trend.

Twisted Tea continues to excel, showing a 34% revenue increase in Q3 in off-premise sales. With a focus on this brand's momentum, SAM is also navigating margin improvement strategies, including supply chain upgrades and cost reductions. Last quarter, a noticeable 250 basis point improvement in gross margins to 45.7% was observed.

Depletions, tracking sales from distributors, dipped by 6% year-over-year last quarter, aligning with forecasts. SAM's expectation for a 5-7% decrease in depletions and shipments for FY23 reflects a fine-tuning of its initial 2-8% prediction.

SAM's stock has seen a 6% uplift since rebounding from its 200-day moving average, hinting at a potential breakout from its stagnation should the report signal advancements in margins, Truly's resurgence, and optimistic depletion projections.

Boston Beer, known for its diverse beverage portfolio including Samuel Adams Boston Lager, is scrutinized in a market valuing it at a premium compared to broader indices and sector averages. With a forward P/E ratio notably above the S&P 500 and its sector, SAM's strategic positioning and future outlook are critical for investors.

As Boston Beer Co faces the challenge of revitalizing its Truly brand and enhancing profitability, the upcoming earnings report is pivotal. It will offer insights into the efficacy of its strategic initiatives and their impact on long-term growth and investment appeal. Investors are advised to monitor these developments closely.