By Senad Karaahmetovic
Boston Beer (NYSE:SAM) shares are moving lower in pre-market Thursday trading after the company’s forecast disappointed investors.
SAM posted a loss per share of $0.93, compared to the consensus for a profit per share of $0.60. Revenue increased 29% to $447.5 million, easily ahead of the consensus of $391.6M.
For 2023, Boston Beer sees EPS in the range of $6-10, a large miss compared to the average analyst estimate of $11.02. The gross margin is seen between 41-43%, again lower than the expected 44.7%. The Q4 gross margin came in at 37%.
“Revenue growth was strong in the fourth quarter; however, margins came in below our expectations largely due to our production mix and supply chain inefficiencies,” said President and CEO Dave Burwick.
“Although near-term trends remain challenging because of the hard seltzer category’s trajectory, we have strong brands across multiple segments, the top salesforce in beer and a highly cash generative business with a strong balance sheet.”
Bernstein analysts downgraded SAM shares to Underperform while Goldman Sachs analysts reiterated a Sell rating.
“[Management] introduced FY23 guidance that was below consensus estimates heading into the print and appropriately cautious, we think, given uncertainties related to the consumer and the stabilization of the hard seltzer category. We continue to believe a lot is riding on Truly's recovery, and while not assumed in FY23 guidance, mgmt is hopeful that Truly will return to share growth in 2H. However, the path to recovery is less clear to us,” GS analysts said in a client note.
Deutsche Bank analysts cut the price target to $307 per share from the prior $316.
“The fact that 4Q was yet another tumultuous quarter raises some questions on management's visibility into both revenue trajectory and the pace of gross margin recovery over the near and medium terms,” Deutsche Bank analysts said.
Bernstein stock trades 13.3% lower in pre-market trading.