The Boston Beer Co. Inc., Boston, reported fourth quarter 2018 net revenue of $225.2 million, an increase of $18.9 million or 9.2 percent from the fourth quarter of 2017, mainly due to an increase in shipments of 6.3 percent.
Net income for the fourth quarter was $21.8 million, or $1.86 per diluted share, a decrease of $8.7 million or $0.71 per diluted share from the fourth quarter of 2017. This decrease was primarily due to a fourth quarter 2017 favorable one-time tax benefit of $1.72 per diluted share related to the Tax Cuts and Jobs Act of 2017. Operating income for the fourth quarter was $28.8 million, an increase of $14 million or 94 percent, primarily due to increases in net revenue and decreased advertising, promotional and selling expenses, partially offset by lower gross margins.
Earnings per diluted share for the 52-week period ending Dec. 29, 2018, were $7.82, a decrease of $0.27 from the comparable 52-week period in 2017. Net revenue for the 52-week period ending Dec. 29, 2018, was $995.7 million.
“We are proud to report depletions growth of 11 percent for the quarter and 13 percent for the full year,” said Jim Koch, chairman and founder of the company, in a statement. “We are thankful to our outstanding employees, distributors, retailers and drinkers, all of whom helped return the company to double-digit volume growth. We believe that our depletions growth is attributable to our key innovations, the quality of our products and our strong brands, as well as sales execution and support from our distributors. We are still seeing challenges across the industry, including a general softening of the craft beer category and retail shelves that offer an increasing number of options to drinkers. We continue to work hard on our Samuel Adams brand messaging, focusing on communicating our artisanal care in the brewing of Samuel Adams Boston Lager.
“While it’s still early, it appears that our new advertising campaign has noticeably improved Boston Lager’s trends,” he continued. “We plan to continue to invest in this campaign in the coming months, with the goal of further improving trends and returning Samuel Adams to growth. We are confident in our ability to innovate and build strong brands and we are planning to launch three new brands in 2019 that we believe will complement our current portfolio and help support our mission of long-term profitable growth.”
Dave Burwick, the company’s president and chief executive officer, added: “Our depletions growth in the fourth quarter was the result of increases in our Truly Hard Seltzer, Twisted Tea and Angry Orchard brands that were only partially offset by decreases in our Samuel Adams brand. Truly continues to grow beyond our expectations and we continue to work hard to grow distribution across all channels while building a strong brand. We are committed to maintaining and improving our position as a leader in the emerging segment of hard seltzer as more competitors enter. Twisted Tea is growing in both distribution and velocity while generating consistent double-digit volume growth. Angry Orchard’s growth is led by Angry Orchard Rosé, which was introduced in early 2018.
“We are excited about our brand investment plans for Angry Orchard in 2019, which include expanding our packaging formats to reach more drinkers,” he continued. “Our overall plans for 2019 include significant investments in the second year of our successful 2018 innovations, which include Angry Orchard Rosé, Truly Berry Variety Pack, Truly Wild Berry, Sam’76 and Samuel Adams New England IPA. These five new innovations in 2018 are within the top product introductions in their combined categories. In 2019, we plan to build upon these successful innovations with three additional brands that address important health-and-wellness opportunities in our categories. These brands include 26.2 Brew from our wholly owned affiliate Marathon Brewing Co., a thirst-quenching gose beer made with sea salt to fit runners’ active lifestyles; Wild Leaf Hard Tea, a craft hard tea with lower calories and sugar, and Tura Alcoholic Kombucha, an organic, light and refreshing shelf-stable alcoholic kombucha with live probiotics and real fruit. We are now in the very early stages of our national launch of both 26.2 Brew and Wild Leaf and we will launch Tura later in the quarter on a more limited geographic basis.” BI
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