BREWERS' GUARDIAN: Boston Beer Co profits soar

Boston Beer Co profits soar
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Rob Brown on 10 March, 2010 11:19:00
 
The Boston Beer Company saw its fourth quarter net profit more than double last
year as gross margins improved and core shipments were upped.
But the brewer warned of a “very challenging” pricing environment in 2010,
cutting forecasts for revenue per barrel increases from 2% to “between 1% and
2%” and warning short-term earnings may slide as a result of investments..
“We are prepared to forsake some earnings in the short-term in order to make
appropriate investments in brand-building activities that position us well for
future growth,” said Boston Beer Co CEO and president Martin Roper.
Net income stood at $7.5 million for the final quarter, up $3.9 million on the
same period last year. Core shipments rose by 5% to 528,000 barrels.
Gross margin was 52%, up from 47%, thanks to price rises, lower costs and the
end of a low-margin brewing contract with Diageo in May, said the firm.
The company said it expects capital expenditure to be between $15 and $25
million for 2010, with the lion’s share going on efficiency improvements and
upgrades at the Pennsylvania Brewery, which was purchased in 2008.
Predicting future stability in packaging and materials costs and improved
production efficiencies, the company is targeting full-year margins for 2010 of
54%.
Boston Beer Co produces more than 21 different styles of beer, including Samuel
Adams Boston Lager, and is the largest craft brewer in the States, accounting
for about 0.9% of the total US beer market.
The company estimated earnings per diluted share for 2010 of between $2.35 and
$2.65.