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The Boston Beer Company, Inc. (SAM) Q3 Earnings call transcript Oct 24, 2024

Daily EarningsMonday, Oct 28, 2024 8:26 pm ET

1min read

SAM --

The Boston Beer Company held its third quarter earnings call for 2024, highlighting the company's performance and outlook for the future. The call, led by Associate General Counsel and Corporate Secretary Michael Andrews, featured insights from Founder and Chairman Jim Koch, CEO Michael Spillane, CFO Diego Reynoso, and other executives.

Market Environment and Performance

Boston Beer reported a decrease in depletions and shipments for the third quarter, primarily due to declines in Truly Hard Seltzer. Despite this, the company achieved price increases of approximately 2%, which was at the high end of their prior guidance range. The pricing environment remains stable, and the company is managing inventory levels to support market execution. The company's priorities include focusing on market share, nurturing innovation, and improving execution.

Brand Portfolio and Innovation

The company's brand portfolio includes Twisted Tea, which remains the clear market leader in hard tea, and Twisted Tea Extreme, a high ABV innovation that is performing well. The company also highlighted its Samuel Adams brand, with a focus on seasonals and a new light beer innovation, Samuel Adams American Light. Boston Beer is also investing in its brands, with a particular emphasis on Twisted Tea, Sun Cruiser, and Hard Mountain Dew.

Financial Performance

Boston Beer's third quarter gross margin increased by 190 basis points, reflecting the company's efforts to improve productivity and profitability. The company has generated over $200 million in operating cash flow this year and has a cash balance of $256 million, with no debt. Boston Beer is focused on managing its cash position, investing in its business, and returning cash to shareholders.

Looking Ahead

The company's outlook for 2024 reflects a focus on improving performance, with a focus on core brands, innovation, and execution. Boston Beer is investing in its brands and driving efficiency in operating expenses. The company expects to continue to face challenges in the near term, but is confident in its long-term growth prospects.

Conclusion

Boston Beer's Q3 earnings call highlighted the company's resilience in the face of market challenges, with a focus on innovation, productivity, and financial discipline. The company's strong brand portfolio and strategic investments position it well for future growth, particularly in the fourth category of beverages. Boston Beer remains committed to its strategy of delivering quality products and returns to shareholders, and is well positioned to navigate the evolving landscape of the alcoholic beverage industry.

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