Back to top

Image: Bigstock

Boston Beer (SAM) to Report Q2 Earnings: What to Expect?

Read MoreHide Full Article

The Boston Beer Company, Inc. (SAM - Free Report) is slated to report second-quarter 2020 results on Jul 23. In the last reported quarter, the company delivered a negative earnings surprise of 24.6%. However, its bottom line beat the Zacks Consensus Estimate by 4.7%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.26, implying a 3.4% decline from the year-earlier quarter's reported figure. The consensus mark has been unchanged in the past 30 days. For quarterly revenues, the Zacks Consensus Estimate stands at $418.8 million, suggesting 31.5% growth from the prior-year quarter reported figure.

Factors at Play

Boston Beer’s top line has been benefiting from sturdy depletions growth, improvement in shipment volumes and efforts to innovate brands. It continued to experience strength in shipments and depletions despite the impacts of the coronavirus pandemic in the last reported quarter. The company’s depletions have been robust on increases in its Truly Hard Seltzer and Twisted Tea brands. Since January 2020, Boston Beer has seen momentum and expanded market share for the Truly brand, while other hard seltzer brands have lost share. This trend is likely to have continued in the second quarter as well, aiding depletions.

The Boston Beer Company, Inc. Price and EPS Surprise

 

The Boston Beer Company, Inc. Price and EPS Surprise

The Boston Beer Company, Inc. price-eps-surprise | The Boston Beer Company, Inc. Quote

Moreover, major innovations, quality of products and strong brands alongside solid sales execution and support from distributors have collectively been aiding depletion. Also, efforts to manage inventory levels are likely to have led to a continued rise in shipments in the second quarter.

However, owing to the impacts of coronavirus, it has been witnessing a significant reduction in keg demand from the on-premise channel, and higher labor and safety-related costs at its breweries. Notably, the COVID-19 outbreak-related safety measures led to the reduction in internal capacity, shifting more volume to third-party breweries. This has caused higher production costs, which is likely to have a bearing on gross margin in the second quarter. Additionally, higher advertising, promotional and selling expenses along with increased general and administrative costs are expected to have remained a threat to its overall profitability.

Zacks Model

Our proven model does not predict an earnings beat for Boston Beer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Boston Beer has a Zacks Rank #1 and an Earnings ESP of 0.00%.

Stocks Likely to Deliver Earnings Beat

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Nu Skin Enterprises, Inc. (NUS - Free Report) presently has an Earnings ESP of +13.74% and it sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Clorox Company (CLX - Free Report) currently has an Earnings ESP of +0.67% and a Zacks Rank #2.

The Procter Gamble Company (PG - Free Report) has an Earnings ESP of +1.51% and a Zacks Rank #2 at present.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

Published in