The Boston Beer Company Inc.
10/23/2025 | Press release | Distributed by Public on 10/23/2025 14:35
Quarterly Report for Quarter Ending September 27, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of the Company for the thirteen and thirty-nine week periods ended September 27, 2025, as compared to the thirteen and thirty-nine week period ended September 28, 2024. This discussion should be read in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements of the Company and Notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
RESULTS OF OPERATIONS
Thirteen Weeks Ended September 27, 2025 compared to Thirteen Weeks Ended September 28, 2024
|
Thirteen Weeks Ended |
||||||||||||||||||||||||||||||||||||||||
|
September 27, 2025 |
September 28, |
Amount |
% change |
Per barrel |
Per barrel |
|||||||||||||||||||||||||||||||||||
|
Barrels sold |
1,936 |
2,243 |
(307 |
) |
(13.7 |
)% |
||||||||||||||||||||||||||||||||||
|
Per barrel |
% of net |
Per barrel |
% of net |
|||||||||||||||||||||||||||||||||||||
|
Net revenue |
$ |
537,494 |
$ |
277.63 |
100.0 |
% |
$ |
605,477 |
$ |
269.94 |
100.0 |
% |
$ |
(67,983 |
) |
(11.2 |
)% |
$ |
7.69 |
2.8 |
% |
|||||||||||||||||||
|
Cost of goods |
264,377 |
136.56 |
49.2 |
% |
325,236 |
145.00 |
53.7 |
% |
(60,859 |
) |
(18.7 |
)% |
(8.44 |
) |
(5.8 |
)% |
||||||||||||||||||||||||
|
Gross profit |
273,117 |
141.07 |
50.8 |
% |
280,241 |
124.94 |
46.3 |
% |
(7,124 |
) |
(2.5 |
)% |
16.13 |
12.9 |
% |
|||||||||||||||||||||||||
|
Advertising, promotional, and selling expenses |
164,739 |
85.09 |
30.6 |
% |
147,986 |
65.98 |
24.4 |
% |
16,753 |
11.3 |
% |
19.11 |
29.0 |
% |
||||||||||||||||||||||||||
|
General and administrative expenses |
44,913 |
23.20 |
8.4 |
% |
43,818 |
19.54 |
7.2 |
% |
1,095 |
2.5 |
% |
3.66 |
18.7 |
% |
||||||||||||||||||||||||||
|
Impairment of intangible assets |
- |
- |
0.0 |
% |
42,584 |
18.99 |
7.0 |
% |
(42,584 |
) |
(100.0 |
)% |
(18.99 |
) |
(100.0 |
)% |
||||||||||||||||||||||||
|
Impairment of brewery assets |
1,416 |
0.73 |
0.3 |
% |
20 |
0.01 |
0.0 |
% |
1,396 |
6980.0 |
% |
0.72 |
7200.0 |
% |
||||||||||||||||||||||||||
|
Total operating expenses |
211,068 |
109.02 |
39.3 |
% |
234,408 |
104.52 |
38.7 |
% |
(23,340 |
) |
(10.0 |
)% |
4.50 |
4.3 |
% |
|||||||||||||||||||||||||
|
Operating income |
62,049 |
32.05 |
11.5 |
% |
45,833 |
20.42 |
7.6 |
% |
16,216 |
35.4 |
% |
11.63 |
57.0 |
% |
||||||||||||||||||||||||||
|
Other income |
2,101 |
1.09 |
0.4 |
% |
3,265 |
1.46 |
0.5 |
% |
(1,164 |
) |
(35.7 |
)% |
(0.37 |
) |
(25.3 |
)% |
||||||||||||||||||||||||
|
Income before income tax provision |
64,150 |
33.14 |
11.9 |
% |
49,098 |
21.88 |
8.1 |
% |
15,052 |
30.7 |
% |
11.26 |
51.5 |
% |
||||||||||||||||||||||||||
|
Income tax provision |
17,995 |
9.29 |
3.3 |
% |
15,584 |
6.95 |
2.6 |
% |
2,411 |
15.5 |
% |
2.34 |
33.7 |
% |
||||||||||||||||||||||||||
|
Net income |
$ |
46,155 |
$ |
23.85 |
8.6 |
% |
$ |
33,514 |
$ |
14.93 |
5.5 |
% |
$ |
12,641 |
37.7 |
% |
$ |
8.92 |
59.7 |
% |
||||||||||||||||||||
Net revenue.Net revenue decreased by $68.0 million, or 11.2%, to $537.5 million for the thirteen weeks ended September 27, 2025, as compared to $605.5 million for the thirteen weeks ended September 28, 2024 primarily due to decreased sales volume impacts of $82.9 million, partially offset by increased pricing of $6.3 million, and favorable product mix of $6.1 million.
Volume. Total shipment volume decreased by 13.7% to 1,936,000 barrels for the thirteen weeks ended September 27, 2025, as compared to 2,243,000 barrels for the thirteen weeks ended September 28, 2024, primarily due to declines in Twisted Tea, Truly Hard Seltzer and Samuel Adams brands that were only partially offset by growth in the Company's Sun Cruiser and Angry Orchard brands.
The Company believes distributor inventory as of September 27, 2025 were at appropriate levels and averaged approximately four and one half weeks on hand which is within our target wholesaler inventory levels of four to five weeks. At the end of September 2024, wholesaler inventory levels were slightly above our target at five and one half weeks.
Net revenue per barrel.Net revenue per barrel increased by 2.8% to $277.63 per barrel for the thirteen weeks ended September 27, 2025, as compared to $269.94 per barrel for the comparable period in 2024, primarily due to increased pricing and favorable product mix.
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Cost of goods sold.Cost of goods sold was $136.56 per barrel for the thirteen weeks ended September 27, 2025, as compared to $145.00 per barrel for the thirteen weeks ended September 28, 2024. The 2025 decrease in cost of goods sold of $8.44, or 5.8% per barrel was primarily due to contract renegotiations and recipe optimization savings of $11.3 million, or $5.84 per barrel, decreases in inventory obsolescence of $7.6 million, or $3.93 per barrel, lower third-party production costs of $6.8 million, or $3.51 per barrel, and improved brewery efficiencies of $3.0 million, or $1.55 per barrel, partially offset by inflationary impacts, including tariffs, of $12.0 million, or $6.20 per barrel.
Inflationary impacts of $12.0 million consist primarily of increased raw material costs of $10.4 million, inclusive of $3.5 million impact from tariffs, and increased internal brewery costs of $1.6 million.
Gross profit.Gross profit was $141.07 per barrel for the thirteen weeks ended September 27, 2025, as compared to $124.94 per barrel for the thirteen weeks ended September 28, 2024.
The Company includes freight charges related to the movement of finished goods from its manufacturing locations to distributor locations in its advertising, promotional and selling expense line item. As such, the Company's gross margins may not be comparable to those of other entities that classify costs related to distribution differently.
Advertising, promotional, and selling expenses. Advertising, promotional and selling expenses increased by $16.8 million, or 11.3%, to $164.7 million for the thirteen weeks ended September 27, 2025, as compared to $148.0 million for the thirteen weeks ended September 28, 2024, primarily due to increased brand media and local marketing investments of $20.9 million partially offset by lower freight costs of $4.1 million due to lower volumes.
Advertising, promotional and selling expenses were 30.6% of net revenue, or $85.09 per barrel, for the thirteen weeks ended September 27, 2025, as compared to 24.4% of net revenue, or $65.98 per barrel, for the thirteen weeks ended September 28, 2024. This increase per barrel is primarily due to lower shipment volume and increased brand media and local marketing investments. The Company invests in advertising and promotional campaigns that it believes will be effective, but there is no guarantee that such investments will generate sales growth.
The Company conducts certain advertising and promotional activities in its distributors' markets, and the distributors make contributions to the Company for such efforts. These amounts are included in the Company's condensed consolidated statements of comprehensive operations as reductions to advertising, promotional and selling expenses. Historically, contributions from distributors for advertising and promotional activities have amounted to between 2% and 3% of net sales. The Company may adjust its promotional efforts in the distributors' markets, if changes occur in these promotional contribution arrangements, depending on industry and market conditions.
General and administrative expenses. General and administrative expenses increased by $1.1 million, or 2.5%, to $44.9 million for the thirteen weeks ended September 27, 2025, as compared to $43.8 million for the thirteen weeks ended September 28, 2024, primarily due to higher salaries and benefits costs.
Impairment of intangible assets. Impairment of intangible assets in the comparable period of 2024 reflected a $42.6 million non-cash impairment charge or $29.1 million net of tax impact, recorded primarily for the Dogfish Head brand, taken as a result of the Company's annual impairment analysis as of September 1, 2024. Beginning in the fourth quarter of 2024 the Company began amortizing the remaining intangible asset over a 10 year life and does not expect any future impairments related to the Dogfish Head brand.
Impairment of brewery assets. Impairment of brewery assets of $1.4 million increased by $1.4 million from the comparable period of 2024, due to higher write-offs of equipment at Company-owned production facilities.
Income tax provision.The Company's effective tax rate of 28.1% decreased from 31.7% in the prior year due primarily to lower non-deductible stock compensation.
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Thirty-Nine Weeks Ended September 27, 2025 compared to Thirty-Nine Weeks Ended September 28, 2024
|
Thirty-Nine Weeks Ended |
||||||||||||||||||||||||||||||||||||||||
|
September 27, 2025 |
September 28, |
Amount |
% change |
Per barrel |
Per barrel |
|||||||||||||||||||||||||||||||||||
|
Barrels sold |
5,776 |
5,997 |
(221 |
) |
(3.7 |
)% |
||||||||||||||||||||||||||||||||||
|
Per barrel |
% of net |
Per barrel |
% of net |
|||||||||||||||||||||||||||||||||||||
|
Net revenue |
$ |
1,579,310 |
$ |
273.43 |
100.0 |
% |
$ |
1,610,627 |
$ |
268.57 |
100.0 |
% |
$ |
(31,317 |
) |
(1.9 |
)% |
$ |
4.86 |
1.8 |
% |
|||||||||||||||||||
|
Cost of goods |
794,412 |
137.54 |
50.3 |
% |
877,580 |
146.34 |
54.5 |
% |
(83,168 |
) |
(9.5 |
)% |
(8.80 |
) |
(6.0 |
)% |
||||||||||||||||||||||||
|
Gross profit |
784,898 |
135.89 |
49.7 |
% |
733,047 |
122.23 |
45.5 |
% |
51,851 |
7.1 |
% |
13.66 |
11.2 |
% |
||||||||||||||||||||||||||
|
Advertising, promotional, and selling expenses |
461,987 |
79.98 |
29.3 |
% |
412,484 |
68.78 |
25.6 |
% |
49,503 |
12.0 |
% |
11.20 |
16.3 |
% |
||||||||||||||||||||||||||
|
General and administrative expenses |
138,615 |
24.00 |
8.8 |
% |
142,226 |
23.72 |
8.8 |
% |
(3,611 |
) |
(2.5 |
)% |
0.28 |
1.2 |
% |
|||||||||||||||||||||||||
|
Impairment of intangible assets |
- |
- |
0.0 |
% |
42,584 |
7.10 |
2.6 |
% |
(42,584 |
) |
(100.0 |
)% |
(7.10 |
) |
(100.0 |
)% |
||||||||||||||||||||||||
|
Impairment of brewery assets |
6,401 |
1.11 |
0.4 |
% |
3,751 |
0.63 |
0.2 |
% |
2,650 |
70.6 |
% |
0.48 |
76.2 |
% |
||||||||||||||||||||||||||
|
Total operating expenses |
607,003 |
105.09 |
38.4 |
% |
601,045 |
100.23 |
37.3 |
% |
5,958 |
1.0 |
% |
4.86 |
4.8 |
% |
||||||||||||||||||||||||||
|
Operating income |
177,895 |
30.80 |
11.3 |
% |
132,002 |
22.00 |
8.2 |
% |
45,893 |
34.8 |
% |
8.80 |
40.0 |
% |
||||||||||||||||||||||||||
|
Other income |
6,152 |
1.07 |
0.4 |
% |
9,226 |
1.54 |
0.6 |
% |
(3,074 |
) |
(33.3 |
)% |
(0.47 |
) |
(30.5 |
)% |
||||||||||||||||||||||||
|
Income before income tax provision |
184,047 |
31.87 |
11.7 |
% |
141,228 |
23.54 |
8.8 |
% |
42,819 |
30.3 |
% |
8.33 |
35.4 |
% |
||||||||||||||||||||||||||
|
Income tax provision |
53,047 |
9.18 |
3.4 |
% |
42,778 |
7.13 |
2.7 |
% |
10,269 |
24.0 |
% |
2.05 |
28.8 |
% |
||||||||||||||||||||||||||
|
Net income |
$ |
131,000 |
$ |
22.69 |
8.3 |
% |
$ |
98,450 |
$ |
16.41 |
6.1 |
% |
$ |
32,550 |
33.1 |
% |
$ |
6.28 |
38.3 |
% |
||||||||||||||||||||
Net revenue.Net revenue decreased by $31.3 million, or 1.9%, to $1.579 billion for the thirty-nine weeks ended September 27, 2025, as compared to $1.611 billion for the thirty-nine weeks ended September 28, 2024, primarily due to decreased sales volume impacts of $64.8 million, partially offset by increased pricing of $20.3 million, and favorable product mix of $12.1 million.
Volume. Total shipment volume decreased by 3.7% to 5,776,000 barrels for the thirty-nine weeks ended September 27, 2025, as compared to 5,997,000 barrels for the thirty-nine weeks ended September 28, 2024, primarily due to declines in Twisted Tea and Truly Hard Seltzer brands that were only partially offset by growth in the Company's Sun Cruiser brand.
Net revenue per barrel.Net revenue per barrel increased by 1.8% to $273.43 per barrel for the thirty-nine weeks ended September 27, 2025, as compared to $268.57 per barrel for the comparable period in 2024, primarily due to pricing and favorable product mix.
Cost of goods sold. Cost of goods sold was $137.54 per barrel for the thirty-nine weeks ended September 27, 2025, as compared to $146.34 per barrel for the thirty-nine weeks ended September 28, 2024. The 2025 decrease in cost of goods sold of $8.80, or 6.0% per barrel was primarily due to contract renegotiations and recipe optimization savings of $31.7 million, or $5.51 per barrel, improved brewery efficiencies of $26.8 million, or $4.66 per barrel, lower third-party production costs of $10.8 million, or $1.88 per barrel, and decreases in inventory obsolescence of $6.3 million, or $1.09 per barrel, partially offset by inflationary impacts, including tariffs, of $26.6 million, or $4.62 per barrel.
Inflationary impacts of $26.6 million consist primarily of increased raw material costs of $21.8 million, inclusive of $6.5 million impact from tariffs, and increased internal brewery costs of $4.8 million.
Gross profit.Gross profit was $135.89 per barrel for the thirty-nine weeks ended September 27, 2025, as compared to $122.23 per barrel for the thirty-nine weeks ended September 28, 2024.
Advertising, promotional, and selling expenses. Advertising, promotional and selling expenses increased by $49.5 million, or 12.0%, to $462.0 million for the thirty-nine weeks ended September 27, 2025, as compared to $412.5 million for thirty-nine weeks ended September
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28, 2024, primarily due to increased brand media and local marketing investments of $53.0 million partially offset by lower freight costs of $3.5 million due to lower volumes.
Advertising, promotional and selling expenses were 29.3% of net revenue, or $79.98 per barrel, for the thirty-nine weeks ended September 27, 2025, as compared to 25.6% of net revenue, or $68.78 per barrel, for the thirty-nine weeks ended September 28, 2024. This increase per barrel is primarily due to lower shipment volume and increased brand media and local marketing investments. The Company invests in advertising and promotional campaigns that it believes will be effective, but there is no guarantee that such investments will generate sales growth.
General and administrative expenses. General and administrative expenses decreased by $3.6 million, or 2.5%, to $138.6 million for the thirty-nine weeks ended September 27, 2025, as compared to $142.2 million for the thirty-nine weeks ended September 28, 2024, primarily due to lower salaries and benefits costs.
Impairment of intangible assets. Impairment of intangible assets in the comparable period of 2024 reflected a $42.6 million non-cash impairment charge or $29.1 million net of tax impact, recorded primarily for the Dogfish Head brand, taken as a result of the Company's annual impairment analysis as of September 1, 2024. Beginning in the fourth quarter of 2024 the Company began amortizing the remaining intangible asset over a 10 year life and does not expect any future impairments related to the Dogfish Head brand.
Impairment of brewery assets. Impairment of brewery assets of $6.4 million increased by $2.7 million from the comparable period of 2024, due to higher write-offs of equipment at third party and Company-owned production facilities.
Income tax provision.The Company's effective tax rate of 28.8% decreased from 30.3% in the prior year due primarily to lower non-deductible stock compensation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are its existing cash balances, cash flows from operating activities and amounts available under its revolving credit facility. The Company's material cash requirements include working capital needs, satisfaction of contractual commitments, stock repurchases, and investment in the Company's business through capital expenditures.
Cash and cash equivalents increased to $250.5 million as of September 27, 2025 from $211.8 million as of December 28, 2024, primarily reflecting cash provided by operating activities, partially offset by the repurchases of the Company's Class A common stock, and purchases of property, plant, and equipment.
Cash provided by operating activities consists of net income, adjusted for certain non-cash items, such as depreciation and amortization, stock-based compensation expense, and other non-cash items included in operating results, and changes in operating assets and liabilities, such as accounts receivable, inventory, accounts payable, and accrued expenses.
Cash provided by operating activities for the thirty-nine weeks ended September 27, 2025 was comprised of net income of $131.0 million and non-cash items of $67.3 million, and net inflows from operating assets and liabilities of $31.9 million. Cash provided by operating activities for the thirty-nine weeks ended September 28, 2024 was comprised of net income of $98.5 million and non-cash items of $118.4 million, partially offset by net outflows from operating assets and liabilities of $9.9 million. The increase in cash provided by operating activities for the thirty-nine weeks ended September 27, 2025 compared to September 28, 2024 is primarily driven by lower inventory levels, reflecting improved supply chain performance and reduced shipment volumes, and lower accounts receivable balances due to decreased shipment volume.
Table of Content
The Company used $36.7 million in investing activities during the thirty-nine weeks ended September 27, 2025, as compared to $72.7 million during the thirty-nine weeks ended September 28, 2024. The decrease in investing activity cash outflows is due to a $20.0 million note receivable issued in the prior year and lower capital investments. For both periods, capital investments were made mostly for the Company's production facilities to drive efficiencies and cost reductions and support product innovation and future growth.
Cash used in financing activities was $154.9 million during the thirty-nine weeks ended September 27, 2025, as compared to $177.1 million during the thirty-nine weeks ended September 28, 2024. The financing activity cash outflows in 2025 and 2024 are comprised mostly of the repurchases of the Company's Class A common stock in the periods.
During the period from December 29, 2024 through October 17, 2025, the Company repurchased and subsequently retired 709,491 shares of its Class A Common Stock for an aggregate purchase price of $161.3 million. As of October 17, 2025, the Company had repurchased a cumulative total of approximately 15.6 million shares of its Class A Common Stock for an aggregate purchase price of approximately $1.33 billion and had approximately $266 million remaining on the $1.6 billion stock repurchase expenditure limit set by the Board of Directors.
The Company expects that its cash and cash equivalents balance as of September 27, 2025 of $250.5 million, along with its projected future operating cash flow and its unused line of credit balance of $150.0 million, will be sufficient to fund future cash requirements. The Company's $150.0 million credit facility has a term not scheduled to expire until December 16, 2027. As of the date of this filing, the Company was in compliance with its covenants to the lender under the credit facility.
CRITICAL ACCOUNTING POLICIES
There were no material changes to the Company's critical accounting policies during the thirteen weeks and thirty-nine weeks ended September 27, 2025.
MARKET CONDITIONS AND TRENDS
Based on the information currently available and tariff programs announced by the U.S. government as of October 17, 2025, the Company estimates tariffs will have an unfavorable cost impact for the full year 2025 of approximately $9 to $13 million or $0.60 to $0.80 earnings per diluted share. These estimates include an unfavorable gross margin impact of between 40 to 60 basis points.
During the thirteen weeks ended September 27, 2025, the Company incurred $4.1 million in tariff costs, of which $3.9 million impacted gross margin. During the thirty-nine weeks ended September 27, 2025, the Company incurred $7.1 million in tariff costs, of which $6.5 million impacted gross margin.
FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q and in other documents incorporated herein, as well as in oral statements made by the Company, statements that are prefaced with the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," "designed" and similar expressions, are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, results of operations and financial position. These statements are based on the Company's current expectations and estimates as to prospective events and circumstances about which the Company can give no firm assurance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement to reflect subsequent events or circumstances. Forward-looking statements should not be relied upon as a prediction of actual future financial condition or results. These forward-looking statements, like any forward-looking statements, involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include the factors set forth in this Quarterly Report on Form 10-Q and in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 28, 2024.
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The Boston Beer Company Inc. published this content on October 23, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2025 at 20:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]