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HomeMarketBoston Beer Stock Slides After Weak Guidance, Struggle With Hard Seltzer

Boston Beer Stock Slides After Weak Guidance, Struggle With Hard Seltzer

Shares of Boston Beer were falling Thursday.

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Chris Ratcliffe/Bloomberg

Boston Beer
delivered an earnings miss for its fourth quarter alongside disappointing full-year guidance as performance of its hard seltzer brand fizzled.

The company posted a loss of 93 cents a diluted share and a net loss of $11.4 million for its fourth-quarter, while Wall Street had expected earnings of 60 cents and income of $11.1 million, according to

It marked a stronger performance than the $4.22 loss a share and $52 million loss
Boston Beer
(ticker: SAM) recorded a year ago.

For full year 2022, depletions—or sales by its distributors to retailers such as grocery stores—slipped 6% on a 52-week comparable basis from the previous year. The downturn was sparked by declines in brands Truly Hard Seltzer, Angry Orchard, Dogfish Head, and Samuel Adams.

For the full year 2023, management offered guidance that included depletions falling 2% to 8%, according to the earnings release.

“As we’ve mentioned on previous calls, the hard seltzer category dynamics have been challenging as the economy reopened and it’s been difficult to predict where consumer demand will ultimately fall,” said James Koch, chairman and founder, according to an earnings transcript on FactSet.

Shares of Boston Beer slipped 13.2% to $341.26 on Thursday.

RBC Capital Markets analyst Nik Modi maintained his Sector Perform rating on the brewer but lowered his price target to $300 from $314.

“While we appreciate SAM’s renewed focus and strategy to turnaround Truly, we remain on the sidelines until there is greater visibility into topline/margin stability,” Modi wrote in a research note Thursday. He added that management plans to improve product packaging, better communicate new ingredients, and work on a new marketing campaign for the hard seltzer.

Credit Suisse analyst Kaumil Gajrawala maintained an Outperform rating on the stock but lowered the price target to $375 from $400.

“Earnings should continue to recover in 2023 but a return to run-rate profitability requires stability. These targets may be a few years away,” wrote Gajrawala in a research note Thursday.

Write to Emily Dattilo at emily.dattilo@dowjones.com

Credit: marketwatch.com

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