Shares of Boston Beer Company (SAM) fell nearly 4% in after-hours trading yesterday, on reporting weaker-than-expected results for the second quarter of Fiscal 2024. Earnings per share (EPS) of $4.39 missed the consensus of $5.01 and also came in lower than the prior-year quarter’s figure of $4.72. Similarly, revenue of $579.10 million fell 4% year-over-year and missed the consensus of $606.66 million.
The alcoholic beverage company cited lower depletions and shipments for its poor performance. Depletions refer to the number of cases sold by wholesalers/distributors to the retailers. Shipments for the quarter ending June 29, 2024, fell 6.4% year-over-year to 2.2 million barrels.
On the brighter side, gross margin improved to 46% from 45.4% reported in Q2 FY23, driven by higher prices, procurement savings, and lower product returns. Moreover, the company continues to buy back its common stock, thus rewarding shareholders. Year-to-date, SAM has repurchased $127 million worth of shares.
SAM Updates Full-Year Outlook
Based on the weak performance in the second quarter, Boston Beer revised its volume guidance for Fiscal 2024. The craft beer maker now expects depletions and shipments to decline in the range of low single-digit to zero as compared to the same quarter last year.
The company earlier projected the percentage change in depletions and shipments to be in the range of minus low single-digit to up low single-digit.
Insights from TipRanks’ Bulls Say, Bears Say Tool
According to TipRanks’ Bulls Say, Bears Say tool, one of the prime concerns for bears was the declining brand value and growth prospects for Boston Beer. SAM shares have plunged 21.7% so far this year, as the beer maker continues to struggle.
Is Boston Beer a Good Stock to Buy?
On TipRanks, SAM stock has a Hold consensus rating based on two Buys, seven Holds, and one Sell rating. The average Boston Beer Company price target of $315.90 implies 16.8% upside potential from current levels. It is important to note that all of these ratings were given before the Q2 print and are subject to change as the analysts review their recommendations.
