Boston Beer Company had a more positive start to fiscal year 2025 compared to the company’s recent quarterly performances, according to Q1 financial results released after trading ended on Thursday.
The company’s shipments (sales to wholesalers) grew 5.3% year-over-year (YoY), to 1.7 million barrels, primarily due to increases from Twisted Tea, Hard MTN Dew and vodka-based hard tea Sun Cruiser, which partially offset declines from Truly Hard Seltzer. Q1 depletions (sales to retailers) declined 1% YoY.
It should be noted that shipment gains may be due partially to inventory levels, which are slightly higher than previous quarters – about five weeks on hand versus four weeks in Q1 2024 and four-and-a-half weeks at the end of Q4 – but the company believes inventory is “at an appropriate level for each of its brands” as of March 29.
The Q1 figures are a continued improvement over previous Q1 performances for the company, which have been steadily improving over the past few years:
- Q1 2024 shipments +0.9%, depletions flat;
- Q1 2023 shipments -7.6%, depletions -6%;
- Q1 2022 shipments -25.1%, depletions -7%.
The last time Boston Beer recorded YoY shipments and depletions growth in Q1 was 2021, when shipments increased 60% and depletions 48%. The company shipped 2.3 million barrels of product in the quarter, 600,000 barrels more than Q1 2025.
“Our first quarter performance reflects a solid start to the year as we increased our market share and significantly expanded gross margin,” president and CEO Michael Spillane said in the release. “As the macroeconomic climate continues to be challenging, we remain focused on executing our strong operating plans for the summer season, across our core brands and our recently introduced innovations, supported in both cases by targeted advertising investment.”
Year-to-date (YTD) through April 18, 2025, Boston Beer depletions have declined 1%, the company shared.
Other notable figures from the quarter:
- Revenue +6.5% due to volume increases and pricing;
- Gross margin +460 basis points, to 48.3%, due to price increases, procurement savings and “lower brewery processing costs due to higher volumes and improved brewery efficiencies,” which were partially offset by inflationary costs;
- Advertising, promotional and selling expenses +14.3% (+$17.3 million), due to increased media and local marketing investments;
- General administrative expenses -4.8% (-$2.4 million), due to CEO transition costs when Michael Spillane took over for Dave Burwick in Q1 2024.
Boston Beer is maintaining its FY25 projections of low-single-digit shipments and depletions declines, to low-single-digit growth. However, the company noted that projections “do not include any impact from tariffs.”
“Based on the information currently available and tariff programs announced to date, the company estimates tariffs will have an unfavorable cost impact for the full year 2025 of approximately $20 to $30 million or $1.25 to $1.90 earnings per diluted share,” Boston Beer wrote. “These estimates include an unfavorable gross margin impact of between 50 to 100 basis points.
“The company’s actual 2025 results could vary significantly from the current projection and are highly sensitive to changes in volume projections, supply chain performance, inflationary impacts and the impact of tariffs.”
As they stand, the company’s remaining full-year projections include:
- +1% to +2% price increases;
- Gross margin between 45% and 47%;
- Advertising, promotion and selling expense increases between $30 million and $50 million, which will occur “primarily in the first half of the year;”
- GAAP earnings per share between $8 and $10.50;
- And capital spending between $90 million and $110 million.
Boston Beer also noted that it expects shipment growth to continue to outpace depletions in Q2, although shipment growth will be “lower than the first quarter.” However, “the trend of shipments exceeding depletions will reverse in the second half of the year, primarily in the third quarter.”
Boston Beer leadership will speak with investors and analysts Thursday at 5 p.m. ET. Look for coverage of the call at Brewbound.com.