The competition in the swill sector has taken its toll on the firebrand Sam Adams Brewing company. While the disgusting beer over at BUD continues to sell like hot-cakes, the halfway decent beer at SAM is under significant pressure by the thousands of innovative and aggressive craft beer operators.
Via Briefing.com
- Reports Q1 (Mar) earnings of $0.53 per share, $0.44 worse than the Capital IQ Consensus of $0.97; revenues fell 5.4% year/year to $188.8 mln vs the $198.15 mln Capital IQ Consensus, due to a decline in core shipments of 6%, partially offset by price increases.
- Co issues downside guidance for FY16, sees EPS of $6.50-7.30 vs. $7.83 Capital IQ Consensus Estimate.
- Underlying the Company’s current 2016 projection are the following 53-week full-year estimates and targets:
- Depletions and shipments percentage change at between minus 4% and plus 2%.
- Price increases of between 1% and 2%. Gross margin of between 51% and 53%.
- Increased investment in advertising, promotional and selling expenses of between zero and $10 million, a decrease from the previously communicated estimate of between $10 million and $20 million.
- Estimated capital spending of between $50 million and $70 million, which will be mostly spent in our breweries to support future growth and product innovation and to drive efficiencies and cost reductions.
- “We believe Samuel Adams has lost share due to the increased competition and continued growth of drinker interest in variety and innovation. During the quarter, we rolled out new beers, including Samuel Adams Nitro White Ale, Samuel Adams Nitro IPA, Samuel Adams Nitro Coffee Stout and Samuel Adams Rebel Grapefruit IPA. These beers have started slowly, but their momentum continues to build. We believe that we are well positioned to meet the longer term challenges of this competitive environment, through the quality of our beers, our innovation capability and our sales execution strength, coupled with our strong financial position that enables us to invest in growing our brands.”
The stock is down 8% in the after-hours session.
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Ouch, but I got my small number of shares when they put hangtags on six packs and let you buy 33 shares at $15. Wife has another lot.
The company did share buybacks starting very early on, and has not needed to sell shares to raise cash, so there are less than 10 million shares outstanding. That makes it a dangerous stock for shorts.
I know several people who did the same. Pretty cool.
Definitely due to competition at least in CO. Most people going for craft beers don’t even consider sam adams any more due to the wide variety available and they don’t get the shelf space like they used to get.
I drink beer and coffee only. Sam Adams to me is pretty good stuff, especially on tap. The craft beers flavouring is gimicky for the most part. The hoppy ones are nice for the drinker who misses them from childhood but most folks think its good because we tell them its good. The mass produced brands have excessive sweetness, easy to detect and due to corn syrup or something else disgusting. I think a decent brew has to be from the tap be it bitchy or just thirst quenching. Coors Lite will always have a place for long afternoon turn evening events. Cheers.
I had the unique opportunity to *enjoy* a Coors Light after imbibing 1.5 liters of Pliny The Elder. Under normal circumstances a Coors Light tastes like club soda, but somehow the Pliny enabled me to detect the subtleties of the Coors. The cheap adjuncts were magically jumping off my palate: rice, beet sugar, corn, perhaps even livestock feed. I suspect their purchasing agents will stop at nothing to appease the accountant overlords: anything fermentable will do, even Chinese dog food or high fructose rice syrup.