Boston Beer (SAM) dips 11% on poor Q4 earnings and guidance; analysts cut estimates

February 27, 2024 4:37 PM EST
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Price: $285.65 -1.97%

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    7 Buy, 16 Hold, 6 Sell

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    Up: 11 | Down: 11 | New: 26
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Boston Beer (NYSE: SAM) saw its shares dip more than 11% in premarket trading Wednesday after the company reported a wider-than-anticipated loss per share for the fiscal fourth quarter, and issued a downbeat full-year guidance.

The firm’s Q4 loss per share was reported at $1.49, worse than the $0.34 loss per share expected by analysts. Revenue came in at $393.72 million, also missing the forecasted $413.77 million.

Boston Beer’s gross margin stood at 37.6%, showing a year-over-year increase of 60 basis points.

Looking forward, the company projects its full-year 2024 EPS to be between $7.00 and $10.00, short of the consensus estimate of $11.39.

“We were pleased to deliver steady improvement in comparable weeks depletions, solid progress on gross margin expansion and strong cash flow generation for the full 2023 fiscal year,” said Chairman and Founder Jim Koch.

In leadership news, it announced that Dave Burwick will retire as President and CEO, as well as from the Board of Directors, effective April 1, 2024.

Michael Spillane, the company's lead director and a board member since 2016, will succeed Burwick as President and CEO upon his retirement.

In the aftermath of the report, Citi analyst Filippo Falorni lowered the EPS estimates to $10.20 and the price target to $350 from $370.

"We remain Neutral as we don’t see a clear path to a return to sustained depletions growth with a still elevated >30x valuation," Falorni said.

Similarly, Goldman Sachs analysts led by Bonnie Herzog also reduced their FY 2024 and 2025 estimates by 5% and 1%, respectively, while maintaining a target price of $257.

"All-in, we come away from the quarter incrementally cautious and expect the stock to trade down sharply tomorrow," analysts said in a note on Tuesday.

"Given still limited visibility on Truly’s path to stabilization and lack of n.t. growth catalysts, we continue to see a negative risk-reward and maintain our Sell rating," they concluded.

By Vahid Karaahmetovic

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