Boston Beer admits a second-quarter hardselzer sales mistake – “We don’t look very smart”

Boston beer CEO David Burwick said Friday, the company Really hard Selzer second quarter sales were disappointingIn an interview, management told CNBC that “it doesn’t look very smart” after previous predictions.

“Especially the summer hits hit us during the trade-off between grocery and liquor store purchases and bar consumption at home,” Berwick said. “Closing Bell” “And to be honest, it hit us hard and fast …. We don’t look very smart by overlooking that guidance.”

Boston Beer’s share price plummeted on Friday, dropping 26% to $ 701 per share as Wall Street responded negatively to its worse-than-expected quarterly results announced Thursday evening. Boston Beer reported $ 4.75 per share with $ 603 million in revenue, but analysts surveyed by Refinitiv asked for $ 6.69 and $ 658 million in revenue per share. Was there. Lower-than-expected demand for Truly was a major source of revenue errors.

Goldman Sachs said in Notes to clients on Thursday The second-quarter decline cast doubt on the company’s ability to properly predict its long-term growth plans and outcomes, even though the Hardselzer category was expected to slow down with some capacity thereafter. .. Red-hot growth in recent years.. Analyst Bonnie Herzog downgraded the stock from buying to neutral.

Boston Beer owns brands such as Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard Hard Cider and other local craft beer brands.

According to Berwick, the company feels “very confident” in the Hardselzer category entering mid-May and Memorial Day, and the unexpected plunge was due to the relaxation of Covid-related restrictions. It was only revealed in late June.

“One of the things happening here was that the country opened in May and people went out to bars and restaurants, unlike the period from March to April. Hardselzer is not so much on these channels. It’s not well developed, “it’s not yet,” Berwick added, “it’s going to happen and we’re there.”

However, the company did not make a pre-announcement to warn investors and analysts of concerns about sales trends. This could be a point for executives to “learn in the future,” he said.

Berwick believes Hardselzer is a growing category, despite the low numbers in the second quarter. However, the category is steadily slowing from its previous triple-digit growth rate.

He believes that the hard Selzer fall is actually a “positive signal of resumption” as people are drawn from grocery stores to bars and prefer draft beer over Selzer.

“We get share. The question is where the category goes. And if someone can better understand that we are all ears, we can’t control it.” Berwick said he has been the company’s president and CEO since 2018 and has been a board member since 2005.

According to Berwick, the Boston Beer Truly Hardselzer and Twisted Tea brands are still the two fastest growing brands in the Hardselzer category. He also said the company hopes the category will be integrated in the future after many new brands have entered the market. This will really help.

Overall, the company’s second-quarter revenue increased 33% year-over-year.

“I don’t think there are any other listed beverage companies, [alcoholic] “We’re approaching such top-line growth, even if it’s not ALC,” Berwick said. “We’re in control of our business in the long run and it’s definitely not a great day for investors. But will come back. ” “In fact, I’ve never been to the same company two days ago. We’re just as confident about our future.”

Boston Beer admits a second-quarter hardselzer sales mistake – “We don’t look very smart”

Source link Boston Beer admits a second-quarter hardselzer sales mistake – “We don’t look very smart”

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