Boston Beer Company, Inc. (NYSE: SAM) reported earnings late Thursday. The momentum has since slowed but the stock still has a 15% upside at the time of writing.
Though the company had reported net revenue of $247.9 million, it represented a 1% growth from the same period last year. Net income however grew at $2.35 per diluted share, highlighting a better than expected quarter. The pre-release estimates stood at $222.7 million and $1.41 for revenue and income per diluted share, respectively. An increase in advertising, promotional and shipping expenses had cut into the revenue, but the Founder, Jim Koch, is optimistic and believes this is the right direction for reestablishing the Samuel Adams and Angry Orchard brands which saw lower sales than products like Twisted Tea and Seriously Spiked.
The company believes focusing on the beer and spiked cider brands will help increase profitability but the fact that this accounting period included the July 4th celebrations, revenues of 1% were not too reassuring. Goldman Sachs downgraded the stock, and analysts were surprised by the revenue beat. The fact that beer was the one of the letdowns for the first half of 2017 is a major warning sign for the company, as the International Wine and Spirits Record showed that beer consumption has decreased on a global scale.