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Factors Likely to Influence Boston Beer's (SAM) Q1 Earnings

·4 min read

The Boston Beer Company, Inc. SAM is scheduled to report first-quarter 2021 results on Apr 22. The company is expected to register top and bottom-line growth in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.39 per share, implying an 81.1% increase from the year-earlier quarter's reported figure. However, the consensus mark has moved down 1.6% in the past seven days.

For quarterly revenues, the Zacks Consensus Estimate stands at $468.9 million, suggesting 41.8% growth from the prior-year quarter’s reported figure.

In the last reported quarter, the company delivered a negative earnings surprise of 15.2%. However, its bottom line beat the Zacks Consensus Estimate by 22.5%, on average, in the trailing four quarters.

The Boston Beer Company, Inc. Price and EPS Surprise

The Boston Beer Company, Inc. Price and EPS Surprise
The Boston Beer Company, Inc. Price and EPS Surprise

The Boston Beer Company, Inc. price-eps-surprise | The Boston Beer Company, Inc. Quote

Key Factors to Note

Boston Beer has been gaining from continued momentum in shipment volumes and depletions. Also, a strong portfolio of globally recognized brands and an enhanced network of wholesale distributors have been aiding depletions. Moreover, the company’s continued focus on pricing, product innovation, growth of non-beer categories alongside brand development is expected to have continued to drive growth in the first quarter.

Notably, strength in brands, particularly Truly Hard Seltzer, Twisted Tea and the Dogfish Head, bodes well. The Twisted Tea brand has been benefiting from higher at-home consumption despite increasing competition from new players. Continued growth in The Truly brand led by Truly Lemonade Hard Seltzer might have acted as an upside. Apart from these, the company remains focused on its cost-saving initiatives and efficiency projects, which are likely to get reflected in the first-quarter results.

However, it has been witnessing sluggish brewery productivity stemming from the pandemic, which has been leading to the shifting of more volumes to third-party breweries and higher production costs. These costs are expected to have negatively impacted the gross margin in the first quarter. Also, a significant reduction in keg demand from the on-premise channel, and higher labor and safety-related costs at its breweries remain concerns. Moreover, higher investments in media and production; elevated salaries and benefits costs; and increased freight to distributors due to higher volumes are likely to have been a threat to the company’s overall profitability.

Zacks Model

Our proven model predicts an earnings beat for Boston Beer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Boston Beer has a Zacks Rank #3 and an Earnings ESP of +17.87%.

Other Stocks Poised to Beat Earnings Estimates

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

Sanderson Farms, Inc. SAFM has an Earnings ESP of +3.13% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast, Inc. MED has an Earnings ESP of +6.25% and a Zacks Rank #2, at present.

Nomad Foods Limited NOMD currently has an Earnings ESP of +0.73% and a Zacks Rank #3.

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