Boston Beer’s Quarterly Report Drops Stock

Jim Koch, chairman of the Boston Beer Company, said his company is doing well in this week’s quarterly earnings report.

But the stock price indicates some loss of optimism. After a long period of strong growth that saw the stock price rise 60 percent, it dropped about 11 percent following the report.

Although production grew considerably in 2014 to 4.1 million barrels, the sell-off likely resulted from the change in year-over-year measurement of depletion, or the rate distributors move a company’s products from warehouse to retail locations. The earnings report revealed a depletions growth rate of 13 percent, compared to an average of 22 percent for 2014.

“I’m pleased with our depletions growth of 13 percent for the quarter and 22 percent for the year, and that The Boston Beer Company, after 30 years of brewing continues to help lead the craft beer industry both in innovation and variety,” said Koch. It was pointed out the fourth quarter depletion numbers were a year-over-year comparison. Company records indicate the final quarter in 2013 was the beginning of the push to improved depletion.

“Our drinkers still get excited by our beers, and our growth is attributable to great beer innovation, coupled with strong sales execution and support from our distributors and retailers,” said Koch. “I am especially proud of our employees for growing Samuel Adams in a very competitive environment and learning to brew, manage and sell a more complicated portfolio.”

After first quarter launches, the portfolio now includes an expanding list of IPAs under the Samuel Adams Rebel line including a session IPA (Rebel Rider) and a double IPA (Rebel Rouser) that complement last year’s new Rebel IPA. “We remain confident about the long-term outlook for the craft category and our Samuel Adams brand,” said Koch.

The company’s fourth quarter net revenue, including the Twisted Tea, Angry Orchard and Traveler brands, was $217.8 million, an increase of 6 percent compared to last year’s fourth quarter. The rise to 4.1 million barrels of production in 2014 was a 20 percent increase over the previous year’s 3.4 million barrels.

Though it will mean sacrificing short term gains, Boston Beer Company will spend 2015 growing its new brands with increased investments in advertising, promotions and selling. The company also projects price increases of one-to-two percent.