Craft beer giant Boston Beer, makers of Sam Adams and Angry Orchard among other popular brands, reported a 14% decline in Q3 net revenue compared with 2015 Q3 results.
In a press release this week, the company disclosed a third quarter 2016 net revenue of $253.4 million, a decrease of $39.7 million or 14% from the third quarter of 2015. Net income for the third quarter was $31.5 million, or $2.48 per diluted share, a decrease of $0.37 per diluted share from the third quarter of 2015.
Depletions decreased 8% and 6% from the comparable 13 and 39 week periods in 2015, the company reports.
“Our third quarter depletions volume continued to be below our expectations, primarily due to decreases in our Samuel Adams, Angry Orchard, Coney Island and Traveler brands that were only partially offset by increases in our Twisted Tea and Truly Spiked & Sparkling brands,” says Martin Roper, the Company’s President and CEO, in a press release. “The comparative decline in the third quarter of 2016 for shipments and depletions was significantly impacted by the third quarter 2015 national launch of Coney Island Hard Root Beer and the loss of share due to new entrants in hard soda since the launch.”
Advertising, promotional and selling expense decreased by $14.4 million or 18% in the third quarter, the company reports, primarily due to “lower media spending and decreases in freight to distributors, as a result of lower volume and lower freight rates.”
The 2016 fiscal year includes 53 weeks compared to the 2015 fiscal year, which included only 52 weeks.
Full-year 2016 year over year depletion and shipment change is now estimated at between -6% and -2%, a decrease of the range from the previously communicated estimate of between -4% and zero.
“Our total company depletion trends declined in the third quarter at a slightly faster rate as we lapped new beer launches from last year, and we saw a further slowdown in growth across the Craft brewing industry,” says Jim Koch, Chairman and Founder of Boston Beer. “I am energized by our team’s plans to return Samuel Adams to growth, that include investments in new packaging, new beers, a fifth seasonal and enhanced drinker communication.”
“Our strong financial position enables us to invest in growing our brands and creating new growth opportunities,” he adds. “A major packaging update for Samuel Adams Boston Lager has already shipped, to be followed by new Seasonal and Rebel packaging by the end of the fourth quarter, and we also expect to complete the national draft launch of Samuel Adams Rebel Juiced, a tropical IPA featuring citrusy hops in late October.”