SAM · The Boston Beer Company, Inc.

The Boston Beer Company reported first quarter 2026 results with depletions down 4% and shipments declining 6.9% to 1.6 million barrels, driven by declines in Twisted Tea, Truly, Samuel Adams, and Hard Mountain Dew, partially offset by growth in Sun Cruiser, Angry Orchard, and Dogfish Head. Shipments fell more than depletions due to prior-year inventory builds for innovations and improved supply chain responsiveness, leaving distributor inventories at 4.5 weeks, down from 5 weeks. Net revenue of $433.9 million decreased 4.4%, cushioned by pricing and mix, while gross margin expanded 100 basis points to 49.3% from benefits in price, mix, procurement savings, and brewery efficiencies, despite inflation, commodities, and tariffs; shortfall fees impacted margins by 37 bps. Operating expenses rose sharply due to $212 million litigation expense plus $36.5 million interest and $4 million fees from a supplier verdict, yielding a GAAP net loss of $145.3 million or $13.88 diluted EPS. Excluding this $15.52 per share hit, Non-GAAP EPS was $1.64. G&A rose 9.1% on legal/consulting, while advertising/selling increased 1.8% on freight. Balance sheet remains strong with $164.1 million cash, no debt, and $150 million credit line available, sufficient for litigation and operations. Share repurchases totaled $31.2 million year-to-date against $1.6 billion authorization. Guidance narrowed for full-year depletions/shipments to low- to mid-single digit declines from flat to down mid-single, maintaining gross margin 48-50%, tariffs $20-30 million, and advertising/selling up $20-40 million. GAAP EPS now reflects litigation at ($7.02) to ($5.02), with Non-GAAP $8.50-$10.50; tax rates adjusted accordingly. Management notes category improvement but portfolio lag, focus on summer advertising, cost mitigation, and cash returns amid dynamic environment.