Boston Beer (SAM) Q3 Earnings Likely to Decline: Here's Why

A generic image of a chart
Credit: Shutterstock photo

The Boston Beer Company, Inc.SAM is slated to report third-quarter 2017 results after the closing bell on Oct 26. In the trailing four quarters, this producer and seller of alcohol beverages has outperformed the Zacks Consensus Estimate by an average of 50%. In the preceding quarter, the company witnessed a positive earnings surprise of 82.2%. Unsurprisingly, investors are keeping their fingers crossed and hoping that Boston Beer surpasses earnings estimate even this time. Let's delve deep and find out the factors impacting the results.

How are Estimates Shaping Up?

Analysts polled by Zacks expect third quarter revenues to be $259.1 million, down 4.5% year over year. This is in sharp contrast with the company's performance in the second quarter, when the top line improved 1.3% from the year-ago period. The scenario is similar for the bottom line too, which is also likely to decrease from the year-ago quarter. The consensus estimate for the quarter under review is currently pegged at $1.84, portraying a significant decline of roughly 26% from the year-ago period. We note that earnings per share have surged 14.1% in the preceding quarter.

Factors Influencing This Quarter

Depletion trends have been a cause of worry for Boston Beer for quite some time now. However, depletion trends have shown a considerable improvement from earlier in the year. Depletions decreased 3% in the second quarter following a 14% decline in the preceding quarter. Well this kindles hope at one end, soft trends in the craft beer and cider categories raises concern on the other. Further, challenges related to a competitive retail backdrop, can't be ignored.

Depletion volumes in the second quarter were primarily impacted by persistent decline in the Samuel Adams and Angry Orchard brands, as well as fall in Coney Island. This was partly mitigated by growth in Twisted Tea and Truly Spiked & Sparkling brands. The company continues to project soft depletion trends for 2017. Evidently, depletions for the year-to-date period through the 29 weeks ended Jul 22, 2017 are estimated to have declined nearly 7% from the comparable year-ago period in 2016.

Nevertheless, Boston Beer is banking on its three-point growth plan focused on revival of Samuel Adams and Angry Orchard brands, cost saving initiatives and long-term innovation to lift performance. The company's focus on pricing, packaging and product innovation along with brand development are also likely to boost its operational performance and market position.

Boston Beer Company, Inc. (The) Price, Consensus and EPS Surprise

Boston Beer Company, Inc. (The) Price, Consensus and EPS Surprise | Boston Beer Company, Inc. (The) Quote

What Does the Zacks Model Suggest?

Our proven model does not conclusively show that Boston Beer is likely to beat earnings estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Boston Beer carries a Zacks Rank #3 but has an Earnings ESP of 0.00%, consequently making surprise prediction difficult.

Stocks With Favorable Combination

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

Avon Products, Inc. AVP has an Earnings ESP of +2.94% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

The Estée Lauder Companies Inc. EL has an Earnings ESP of +0.34% and a Zacks Rank #2.

The Hain Celestial Group, Inc. HAIN has an Earnings ESP of +7.00% and a Zacks Rank #2.

Zacks' Hidden Trades

While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?

Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.

Click here for Zacks' secret trade>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Boston Beer Company, Inc. (The) (SAM): Free Stock Analysis Report

Avon Products, Inc. (AVP): Free Stock Analysis Report

Estee Lauder Companies, Inc. (The) (EL): Free Stock Analysis Report

The Hain Celestial Group, Inc. (HAIN): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More