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United States. Securities and Exchange Commission

The Boston Beer Company Updates 2021 Guidance, Expects Lower Shipment Growth and Gross Margin

Strategic Insights

— 2 min read

The Boston Beer Company, Inc., a leading brewer of craft beverages, has filed a Form 8-K with the Securities and Exchange Commission (SEC) on January 13, 2022, updating its guidance for fiscal year 2021. Despite strong depletion growth, the company now estimates that shipment growth for its products and gross margins will be below expectations due to wholesaler inventory reduction and higher supply chain costs. The updated guidance suggests that full-year 2021 earnings per diluted share will be between a loss of $1.00 and income of $1.00, a significant decrease from the prior guidance of income between $2.00 and $6.00.

Key Takeaways:

  • The Boston Beer Company has updated its guidance for fiscal year 2021, expecting lower shipment growth and gross margin due to wholesaler inventory reduction and higher supply chain costs.
  • The company now estimates that shipment growth for its products will be between 15% and 16%, a decrease from previous expectations.
  • Gross margin is expected to be between 38% and 40%, down from previous expectations.
  • Increased investments in advertising, promotional, and selling expenses are expected, with costs ranging from $85 million to $95 million.
  • The non-GAAP effective tax rate is estimated to be approximately 43%, excluding the impact of ASU 2016-09.
  • Capital spending is expected to be between $145 million and $150 million.
  • The company is also providing preliminary guidance for fiscal year 2022, with expected depletions and shipments percentage increase of between mid-single digits and low double-digits.
  • Gross margin is expected to be between 45% and 48% in 2022.
  • Increased investments in advertising, promotional, and selling expenses are expected, with costs ranging from $10 million to $30 million in 2022.
  • The non-GAAP effective tax rate is estimated to be approximately 26%, excluding the impact of ASU 2016-09.
  • Capital spending is expected to be between $140 million and $190 million.

Statistics:

  • Estimated full-year 2021 earnings per diluted share: between a loss of $1.00 and income of $1.00.
  • Expected shipment growth for fiscal year 2021: 15% to 16%.
  • Expected gross margin for fiscal year 2021: 38% to 40%.
  • Expected increased investments in advertising, promotional, and selling expenses for fiscal year 2021: $85 million to $95 million.
  • Expected non-GAAP effective tax rate for fiscal year 2021: approximately 43%, excluding the impact of ASU 2016-09.
  • Expected capital spending for fiscal year 2021: $145 million to $150 million.
  • Expected depletions and shipments percentage increase for fiscal year 2022: between mid-single digits and low double-digits.
  • Expected gross margin for fiscal year 2022: 45% to 48%.
  • Expected increased investments in advertising, promotional, and selling expenses for fiscal year 2022: $10 million to $30 million.
  • Expected non-GAAP effective tax rate for fiscal year 2022: approximately 26%, excluding the impact of ASU 2016-09.
  • Expected capital spending for fiscal year 2022: $140 million to $190 million.

Sources:

  • UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Persuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  • Annual Report on Form 10-K for the fiscal year ended December 26, 2020
  • Quarterly Reports on Form 10-Q for the periods ended March 27, 2021, June 26, 2021, and September 25, 2021.

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