Boston Beer Company Reports Depletions +46%, Shipments +39.8% in Q2

Boston Beer Company reported second-quarter depletions (sales-to-retailers) growth of 46% and shipments (sales-to-wholesalers) growth of 39.8% during the second quarter of 2020, according to financial results shared after the end of trading today.

Through the first 26 weeks of 2020, Boston Beer posted depletions (+43% percent) and shipments (+36.5% percent) growth due to its Truly Hard Seltzer and Twisted Tea brands. The company has shipped about 3.3 million barrels year-to-date through June 27 — 1.9 million barrels of which shipped in Q2.

“We achieved depletions growth of 46% in the second quarter, of which 42% is from Boston Beer legacy brands and 4% is from the addition of Dogfish Head brand,” Boston Beer founder Jim Koch said in a press release. “I am tremendously thankful for the efforts of our coworkers in achieving our ninth consecutive quarter of double-digit growth, while maintaining a focus on quality and innovation.”

Boston Beer is now projecting full-year 2020 shipments and depletions growth between 27% and 35%.

Boston Beer CEO Dave Burwick added that the company’s depletions growth was due to the Truly Hard Seltzer, Twisted Tea and Dogfish Head Craft Brewery brands. Helping accelerate Truly’s growth was the launch of Truly Hard Lemonade.

“Since early January, Truly has grown its velocity and its market share sequentially while other national, regional and local hard seltzer brands have entered the category,” Burwick added in the release. “Truly is the only hard seltzer, not introduced earlier this year, to grow its share during 2020.”

Boston Beer — which also makes the Samuel Adams and Angry Orchard brands — reported Q2 net revenue growth of 42%, to $452.1 million, compared to Q2 2019.

Year-to-date through June 27, Boston Beer’s net revenue increased 37.3%, to $782.7 million, compared to the first half of 2019.

As for the impact of COVID-19, Boston Beer reported a COVID related pre-tax net revenue hit and cost increases totaling $14.1 million. The company reported that $5.8 million of that $14.1 million was related to estimated keg returns from wholesalers and retailers. The company said COVID-19 has also hampered brewery productivity, forcing it to shift production to third-party producers, which negatively affected its gross margins.

Gross margins in Q2 were 46.4%, a decline from 49.9% compared to the same Q2 2019. Halfway through 2020, gross margin is 45.7%, down from 49.7% at the midway point of 2019.

Boston Beer stock (SAM) closed trading Thursday at around $659.23, not quite at the 52-week high of $697, but way above the 52-week low of $290.02 around mid-March.

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