Boston Beer Co. reports third quarter 2017 net revenue of $247 million, a decrease of $6.4 million or 3% from the third quarter of 2016, mainly due to a 4% decline in shipments, most of which the company attributed to the Samuel Adams brand. Net profit rose to $33.7 million, or $2.78 a share, an increase of $2.1 million or 30 cents a diluted share from the third quarter of 2016.
This increase in net income was primarily due to a decrease in general and administrative expenses, increases in gross margin and a lower tax rate that were partially offset by a decrease in net revenue.
Jim Koch, Chairman/Founder said:
“Total Company depletion trends showed continued improvement during the last quarter while still remaining slightly negative. We remain challenged by the general softening of the craft beer and cider categories and a competitive retail environment with a lot of options for our drinkers. Our leadership team continues to make strides to address these challenges.:
The company plans to launch Samuel Adams Sam ’76, a uniquely flavorful and refreshing lager ale union. The Sam ’76 launch will be supported by new media, launch events and other marketing programs to drive awareness of “this revolutionary beer.” Koch said. Other innovations planned for the first quarter of 2018 include Samuel Adams New England IPA and Angry Orchard Rosé.
Martin Roper, President/ CEO, attributed the third quarter depletions decline primarily to decreases in the Samuel Adams and Angry Orchard brands and a slight headwind from the timing of our fiscal quarter in relation to the Fourth of July holiday. These decreases were only partially offset by increases in Truly Spiked & Sparkling and Twisted Tea brands.
“We are encouraged by improving total Company depletions trends since the first quarter, but the on-premise channel remains challenging. Truly Spiked & Sparkling has developed as one of the leaders in the emerging hard sparkling water segment and Twisted Tea continues to grow distribution and pull,” Roper said, adding:
“Most of our volume declines for the quarter resulted from the continued underperformance of our Samuel Adams brand; however, we have seen sequential improvements relative to first and second quarter performance. Our plans to improve our Samuel Adams trends include the introduction of a new campaign this quarter with integrated messaging across media, digital and point of sale, along with a more focused sales execution on our core initiatives. Our plans also include the national launch of Sam ’76 planned for early 2018 and the return of Samuel Adams Cold Snap as our first quarter seasonal.
“In the third quarter, we also saw continued declines in the cider category and in our Angry Orchard brand. As the leader in the cider category, we are determined to turn these category trends around, and will introduce a new media campaign designed to better educate drinkers on hard cider and the occasions to drink it while explaining the quality and uniqueness of Angry Orchard.
“We are excited by our planned national launch of Angry Orchard Rosé cider as we hope to attract new drinkers to the category. This launch will be integrated into our new campaign reinforcing occasions, innovation and quality.”