Boston Beer Company ended fiscal year 2024 with nearly flat revenue growth, and low-single-digit declines in both shipments and depletions, as the company continues to battle declines from Truly Hard Seltzer, it reported today in its Q4 and FY24 financials release.
Full-year depletions (sales to retailers) declined -2%, while shipments (sales to wholesalers) declined -2.4%, to 7.5 million barrels, “primarily due to declines in Truly Hard Seltzer that were partially offset by growth in Twisted Tea and Sun Cruiser,” the company reported. Total net revenue increased +0.2%, to $2.01 billion, with price increases and lower returns partially offset by lower volumes.
Declines improved from fiscal year 2023, when depletions declined -5% and shipments -3.8%.
“We were pleased to deliver improved operational and financial performance in 2024,” founder and chairman Jim Koch said in the release. “I’m confident we have the right strategy and team in place and we will be stepping up advertising investment in 2025 to further strengthen our brands and drive long-term sustainable growth.”
In Q4 (13 weeks ending December 28, 2024), depletions were flat, while shipments declined -0.5% year-over-year (YoY), to 1.5 million barrels, with Truly declines once again offsetting growth from Twisted Tea and Sun Cruiser, as well as Hard MTN Dew. Q4 net revenue increased +2.2% YoY, to $402.3 million, due to price increases that were “partially offset by lower volumes and increased excise taxes.”
Full-year ad spend and selling costs decreased -0.7%, or -$4 million, with a -$10.5 million decrease in freight costs from efficiencies and lower volumes partially offset by a +$6.5 million increase in media investments and salaries. In Q4, ad spend and selling costs increased +$8.5 million, or +$10.9 million, with increased brand investment and salaries and benefits (+$12.2 million) partially offset by decreased freight costs (-$1.3 million).
Boston Beer also recorded a $3.4 million impairment in Q4 credited to brewing equipment and other brewery assets. The impairment is more than double the $1.5 million impairment recorded in Q4 2023.
For FY24, Boston Beer recorded $42.6 million in impairment costs, recorded mainly by Dogfish Head ($41.2 million), as reported in Q3. Additionally, the company reported $26 million in contract settlement payments for the year, due to cash payout costs as it restructured its contract brewing network.
For 2025, Boston Beer is projecting between a low-single-digit decline to low-single-digit increase in depletions, with price increased between +1% and +2%. 2025 advertising, selling and promotional expenses are expected to increase between +$30 million to +$50 million – excluding changes in freight costs – and are expected to occur “primarily in the first half of the year, with a significant year over year increase in the first quarter.”
In the first eight weeks of 2025 (ending February 21), year-to-date depletions are flat, the company reported, noting that Q4 and Q1 are historically its lowest volume months.
First half 2025 shipments are expected to be on the high end of the company’s full-year guidance “due to timing of estimated demand and wholesaler inventory levels for certain brands and styles, primarily driven by Sun Cruiser, Hard MTN Dew and Truly Unruly,” the company’s 8% ABV Truly extension, the company wrote.
“The fourth quarter provided a solid finish to 2024 with flat depletions, gross margin expansion and strong cash generation,” president and CEO Michael Spillane said. “We are entering 2025 as a stronger company focused on end-to-end execution which is showing progress in a dynamic operating environment. We remain committed to our strategy of a diversified portfolio of core brands and strong innovation supported by increased advertising investment, transforming our supply chain and leveraging our industry leading salesforce.”
Boston Beer will host its quarterly call with investors and analysts later today. Look for coverage of the call, as well as more information from the company’s annual report.