Boston Beer Co., brewer of the Samuel Adams beers, reported higher sales for the fourth quarter and all of 2010, although its stock was punished — the stock prices dropped 11% in after hours trading Tuesday — because it did not meet Wall Street’s expectations. Shares of Boston Beer (SAM) had more than doubled since the beginning of 2010.
Highlights of its report were:
* Depletions growth of 12% for the quarter and 11.5% for the year.
* Core shipments increase of 7% for the quarter and 12% for the year.
* Core gross margin improvement to 55% for 2010 from 52% in the prior year.
* Increase in the company’s investment behind its brands for 2010 of $14.1 million.
* Earnings per diluted share of $0.87 for the fourth quarter and $3.52 for the year.
Given that Boston Beer accounts for about one in five craft beers sold (according to the Brewers Association definition) this is one more sign that when the final totals are in for 2010 overall craft beer sales will likely be up about 11% to 12%.
Boston Beer founder Jim Koch, summarized the success for a press release: “We achieved depletions growth of 12% in the fourth quarter, and total depletions for the year grew 11.5% to 30.9 million case equivalents. This record total depletions for the fourth quarter and full year is attributable to our strong sales execution and continued support from our wholesalers and retailers. While we continue to see expanded distribution of domestic specialty brands and local craft brands, which is increasing competition in the category, we are happy with the health of our brand portfolio. After 26 years, we continue to grow our flagship beer, Samuel Adams Boston Lager, even as we continue to innovate and develop new beer styles, such as Samuel Adams Noble Pils, the Barrel Room Collection and Infinium.”
He announced the company will expand it Freshest Beer Program, tested last year with five wholesales, adding ten wholesalers in the first quarter. “This program substantially reduces both the time and the temperature our beer experiences at wholesaler warehouses before reaching the market,” he sad. “This reduction in time and temperature is not only great for our beer; we believe it will also be financially and organizationally beneficial to our wholesalers and in the long term good for our business.”