Yahoo Finance Boston Beer Co Inc (SAM) (Q1 2024) Earnings Call Transcript Highlights: A Strong Start with ...
Revenue Growth: Increased by 3.9% due to volume increases, pricing, and lower returns.
Net Income: Reported EPS of $1.04 per diluted share, compared to a net loss of $0.73 per diluted share in Q1 2023.
Gross Margin: First quarter gross margin of 43.7%, up 570 basis points year-over-year.
Depletions: Flat in the first quarter.
Shipments: Increased by 0.9% from the prior year.
Twisted Tea Sales: Dollar sales up 21% in Q1, growing share by 1.4 points in measured channels.
Truly Hard Seltzer: Continues to face pressure, expected category volume declines in the low teens for 2024.
2024 Guidance: Depletions and shipments expected to range from a decrease of low single digits to an increase of low single digits.
Capital Expenditures: Expected to be between $90 million and $110 million for 2024.
Share Repurchase: $65 million in stock repurchased in 2024, with $200 million remaining on the authorization.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you give us any sense of what was going on in April? Is this just kind of timing with Easter and kind of best to look at all 16 weeks together in terms of giving a fair picture of current trends? A: Michael Spillane, President, CEO & Director of Boston Beer Company, emphasized the importance of looking at longer periods, like 13 or 16 weeks, for a fair comparison due to varying factors such as Easter timing and distributor ordering patterns.
Q: Can you talk about Truly shelf space gains in the spring shelf sets for the core products? A: Diego Reynoso, CFO & Treasurer, noted that the situation with Truly shelf space is fluid, with some gains in lighter flavors and the introduction of new additions, despite some losses in other flavor innovations.
Q: Could you expand a bit on any new priorities or points of emphasis that you see for the organization, either strategically or operationally? A: Michael Spillane highlighted his focus on executing the existing strategy with end-to-end alignment and sharpening the company's approach to innovation, ensuring it is distinctive, profitable, and scalable.
Q: The start to the year was strong on gross margin. How does it compare to your expectations, and does it affect your confidence in achieving the upper end of the gross margin range for the year? A: Diego Reynoso expressed confidence in their gross margin plan, maintaining the guidance while acknowledging the quarterly fluctuations that are typical year-over-year.
Q: What do you believe is the right level of advertising spend as a percentage of sales moving forward, especially with increasing competition? A: Michael Spillane and C. James Koch, Founder & Chairman, discussed their strategy of investing in advertising where it yields good returns, emphasizing that Boston Beer aims to maintain a higher share of voice relative to its market share to drive long-term growth.
Q: Could you provide more color on the performance and expectations for HARD MTN DEW, especially given the decline expected in the hard seltzer category? A: Michael Spillane described the ongoing transition of HARD MTN DEW to their distribution network, noting the brand's strong equity and the expectation of national distribution alignment in the future, which is included in their guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
