Boston Beer pulls guidance as hard seltzer demand fizzles
Brewer says it overestimated demand for Truly brand in July
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Boston Beer Co. withdrew the financial outlook it gave in July, as the demand for hard seltzers has continued to slow.
The brewer said in July it had overestimated demand for its hard seltzer brand Truly in anticipation of the summer. At the time, Boston Beer said its outlook for hard seltzers in the second half of 2021 was uncertain and lowered its earnings forecast.
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On Wednesday, the maker of Samuel Adams beer said it now expects its results to fall below that forecast range as it will likely incur inventory write-offs related to the carbonated drinks, shortfall fees payable to third-party brewers and other costs.
Shares fell nearly 10% in after-hours trading following the news. Boston Beer’s stock closed Wednesday at $559.40 a share, down nearly 44% so far this year.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SAM | BOSTON BEER CO. INC. | 317.76 | +4.79 | +1.53% |
The company said industry reports have estimated that the full-year 2021 volume for retail sales of hard seltzers will have more than 100 million fewer cases than May 2021 projections and more than 30 million fewer cases than July estimates.
BOSTON BEER STOCK OBLITERATED AS HARD SELTZER HIT
Boston Beer said Wednesday that there will be continuing uncertainty about hard seltzer demand trends for the remainder of 2021 and that it would continue to review volume projections.
Hard seltzers—essentially flavored alcoholic sparkling water—had been one of the hotter parts of the booze market in recent years, tempting more health-conscious drinkers away from beer. Based on the growth of brands like Truly and White Claw, owned by Mike’s Hard Lemonade Co., other beverage makers joined the market, including Anheuser-Busch InBev SA .
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In July, Boston Beer founder and Chairman C. James Koch said a maturing market and new hard seltzer brands had resulted in "in a proliferation and consumer confusion." The company also faced a tough year-over-year comparison as the preceding year had seen consumers stocking up on items amid Covid-19 restrictions.
Boston Beer plans to report results for the current quarter on Oct. 21.
Write to Robert Barba at Robert.Barba@wsj.com