"Our depletions growth in the second quarter was a result of increases in our Truly Hard Seltzer and Twisted Tea brands and the addition of the Dogfish Head brands that were only partially offset by decreases in our Samuel Adams and Angry Orchard brands," Boston Beer Company president and CEO Dave Burwick said in a statement. "The growth of the Truly brand, led by Truly Hard Lemonade, has accelerated and continues to grow beyond our expectations."
Burwick noted that Truly is the only hard seltzer, not introduced earlier this year, to grow its share during 2020. Meanwhile, the Twisted Tea brand "continues to generate double-digit volume growth rates that are well above full-year 2019 trends."
Boston Beer Company's overall depletions, including the addition of its recently acquired Dogfish Head brand, were up 46 percent in the second quarter while shipment volume was approximately 1.9 million barrels, rising 39.8 percent for the 13 week period.
The company said it expects to "increase our brand investments in the second half compared to the first half and see significant distribution and volume growth opportunities for our Truly, Twisted Tea and Dogfish Head brands."
Meanwhile, volume for the Samuel Adams and Angry Orchard's brands continue to decline due to the pandemic's impact on on-premise retailers.
"We are encouraged that Samuel Adams Boston Lager and Angry Orchard Crisp Apple both have experienced double-digit growth in the measured off-premise channels during the quarter," Burwick added. "We continue to work on returning these brands to growth, but do not expect them to grow during 2020 because of on-premise closures. "
The brewer estimates full-year shipments and depletions growth to be between 27 percent and 35 percent.
The company reported a net income of $60.1 million, or $4.88 a share, compared with $27.9 million, or $2.36 a share, a year ago while net revenue rose to $452.1 million from $318.4 million a year ago.
Meanwhile, the company's gross margin was 46.4% for the second quarter, a 49.9% decrease compared to the same 13-week period a year ago. The full-year gross margin target is now between 46 percent and 48 percent.
Advertising, promotional and selling expenses increased by $6.3 million, or 6.7 percent, compared to the previous year due to increases in salaries and benefits, brand investments in media and production, the addition of Dogfish Head brand-related expenses beginning July 3, 2019, and increased freight costs from distributors due to higher volumes. The company estimates increased investment in advertising, promotional and selling expenses between $70 million and $80 million for the full year.
Full-year 2020 capital spending is now estimated to be between $180 million and $200 million.