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Boston Beer Co. Inc. Message Board

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  • max51005 max51005 May 5, 2011 1:20 PM Flag

    Options priced today.

    Advertising, promotional and selling expenses are one of the only absolute ways to control the earning picture. Building a brand name is important but to the tune of $6.4 Million It seems a bit much!

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    • But if you consider that the have guided to a 12-18 MM increase in this line item (ex fuel costs increases, the increase you can back into using the 20 cent FY EPS potential impact they gave suggests about 550 k of the increase in APS in Q1 can be explained by fuel costs. that gives an adjusted quarterly APS increase of 5.75MM) you realize that they are left with a range of 6.25MM - 12.25MM of total increase in APS for the FY or 2.08 - 4.08 MM per Q in increased spending for brand building. Therefor you will see this line item more in line with the historical APS quarterly numbers and at the higher revenue level the APS per bbl will most likely be flat to down vs last year thus actually adding to the quarterly earnings power of the company.

      That said, I think the stock price is still too high because with the slowing depletion growth 8-10% the PE multiple should rightfully decline from the historical 23-25 x

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