Boston Beer shares plunge 26% after weak sales of Really Tough Seltzer weighed on earnings

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Really tough seltzer

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Boston Beer shares fell 26% in morning trading Friday after disappointing demand for Hard Seltzer dragged the company’s quarterly earnings and earnings.

The Sam Adams Brewery reported earnings of $ 4.75 per share on net sales of $ 603 million. Analysts polled by Refinitiv expected earnings of $ 6.69 per share and sales of $ 658 million.

The company blamed the disappointing quarter on weaker than expected demand for hard seltzer. Boston Beer owns Truly Hard Seltzer, one of the top brands in this category, but new competition and slower growth were among the factors detracting from the brand’s sales this quarter.

“We overestimated the hard seltzer category growth and demand for Truly in the second quarter, which had a negative impact on our volume and earnings for the quarter and our estimates for the remainder of the year,” said Dave Burwick, CEO of an explanation.

He added that Boston Beer had increased its production of Truly to meet peak summer demand. Given lower than expected demand, breweries now have higher inventory levels and the company experienced higher supply chain costs that weighed on its margins.

The company also lowered its full-year forecast for adjusted earnings per share. For 2021, the company now expects adjusted earnings of $ 18-22 per share, compared to the previous outlook of $ 22-26 per share.

Including Friday’s losses, Boston Beer stock is down 29% this year for a market value of $ 8.6 billion.

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