The Boston Beer Company (SAM) investor relations material

Executive summary

• Second quarter 2026 depletions declined 6% and shipments fell 4.5% year-over-year, with net revenue decreasing 3.3% to $568.3 million, mainly due to declines in Twisted Tea, Truly, Samuel Adams, Hard MTN DEW, and Dogfish Head, partially offset by Sun Cruiser and Angry Orchard growth.

• Gross margin improved by 60 basis points to 50.4% due to brewery efficiencies, procurement savings, positive mix, and price increases, despite inflation and tariffs.

• Net income for Q2 2026 was $51.6 million, down from $60.4 million in Q2 2025, with GAAP diluted EPS of $4.96, including a $1.31 per share benefit from a favorable litigation adjustment; non-GAAP diluted EPS was $3.65.

• Year-to-date, depletions fell 5%, shipments dropped 5.6%, and net revenue declined 3.8% to $1.002 billion; year-to-date GAAP diluted loss per share was $8.99, including $14.27 per share in non-recurring litigation expenses.

• Share repurchases exceeded $54 million year-to-date, with $174 million remaining under the buyback authorization.

Financial highlights

• Q2 2026 revenue decreased 3.3% due to lower volume, partially offset by price increases and favorable mix.

• Gross margin for Q2 was 50.4%, up from 49.8% a year ago; gross profit per barrel increased to $139.89.

• Advertising, promotional, and selling expenses increased 16.4% year-over-year in Q2 to $185.9 million, mainly from local marketing and higher freight costs.

• Operating profit benefited from gross margin gains but was offset by higher advertising and freight inflation.

• Non-recurring pre-tax litigation expense of $192.6 million was recorded in the first half of 2026, related to a supplier dispute, impacting GAAP EPS by $14.27 year-to-date.

Outlook and guidance

• Full-year 2026 depletions and shipments expected to decline low- to mid-single digits; trends suggest performance toward the lower end.

• Gross margin guidance raised to 48.5%-50% for the year, reflecting cost savings, positive mix, and including tariff costs projected at $20–$30 million.

• Non-GAAP EPS guidance held at $8.50-$10.50; GAAP EPS forecasted at $(6.23) to $(4.23), including $(14.73) per share in non-recurring litigation expenses; effective tax rate expected at 29%-30%.

• Q3 shipments expected to decline low to mid-single digits, with modest growth in Q4 due to easier comps and innovation launches.

• Capital spending projected at $60–$80 million.