Boston Beer was Truly surprised by the demand for hard seltzer fizzling out so quickly. 'We were surprised at the sharpness and the suddenness of the change in trajectory,' said Chairman and Founder James Koch.
Shares of Boston Beer Co. Inc. suffered a record plunge to a one-year low Friday, as an avalanche of analysts slashed their price targets following the alcoholic beverages company’s biggest earnings miss in years.
“ “[T]o be totally honest, we were surprised at the sharpness and the suddenness of the change in trajectory.” ” Revenue rose 33% to $602.8 million, but was 8.3% below the FactSet consensus of $657.6 million, the biggest miss since the company missed revenue expectations by 9.1% in the third quarter of 2016.
Chairman and Founder James Koch said on the post-earnings conference call with analysts that Truly seltzer sales were at a “really choppy” point, as the company was lapping “crazy times” last year when the COVID-19 pandemic led to pantry loading. “So, it’s a really, really murky crystal ball,” Koch said. “It’s more like looking into a bowling ball. You can’t see much.”
“Despite the recent pullback in the stock, we see a negative risk-reward as key growth engine slows sharply/competition ramps with visibility clearly constrained, Street [estimates] still too high, and ~40x [price-to-earnings ratio] at risk of further de-rating as expectations further reset,” Grundy wrote.
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