Boston Beer Q2 Earnings Call Highlights

Boston Beer’s second quarter was mixed: demand stayed weak, with depletions down 6% and revenue down 3.3% as Twisted Tea, Truly, Samuel Adams, Hard MTN DEW and Dogfish Head declined. Growth in Sun Cruiser and Angry Orchard helped offset some of the pressure.

Margins improved despite volume declines: gross margin rose to 50.4% thanks to brewery efficiencies, favorable mix, procurement savings and price increases. However, advertising and promotional spending climbed sharply, including higher brand marketing and freight costs.

Guidance was kept intact, but spending plans were trimmed: the company maintained full-year volume and EPS guidance while raising the low end of its gross margin outlook. It also cut planned incremental ad spending by $20 million and reduced 2026 capex guidance.

Boston Beer NYSE: SAM said second-quarter demand remained challenging as declines in Twisted Tea and Truly continued to weigh on volume, even as Sun Cruiser and Angry Orchard posted growth and gross margin improved.

On the company’s 2026 second-quarter earnings call, Founder, CEO and Chairman Jim Koch said the broader beer market improved modestly in the first half of the year but remained uneven. Boston Beer estimates the combined beer and “beyond beer” market declined 2% in volume in the first half, compared with a 4% decline for full-year 2025. Koch said the category was nearly flat in the first quarter, softened in the second quarter and saw May as “particularly challenging,” before improving in June on drinking occasions tied to the World Cup and America’s 250th anniversary celebrations.

“We anticipate industry volume headwinds for the remainder of 2026 as consumers remain under pressure from the cumulative effects of inflation and a significant increase in gas prices,” Koch said.

Volume declines continue, but margins improve Chief Financial Officer Diego Reynoso said second-quarter depletions declined 6% from the prior year, while shipments decreased 4.5%. The declines were driven primarily by lower volume in Twisted Tea, Truly, Samuel Adams, Hard MTN DEW and Dogfish Head, partially offset by increases in Sun Cruiser and Angry Orchard.

Revenue for the quarter fell 3.3%, reflecting lower volume, partially offset by price increases and favorable product mix. Reynoso said positive mix was driven by strong growth in Sun Cruiser.

Gross margin improved to 50.4%, up 60 basis points year over year. Reynoso attributed the improvement to brewery efficiencies, favorable product mix, procurement savings and price increases, partly offset by higher commodity, tariff and energy-related costs.

Advertising, promotional and selling expenses rose $26.2 million, or 16.4%, from the prior year. That included $17.5 million of increased local brand marketing and point-of-sale investments, along with an $8.6 million freight cost increase.

General and administrative expenses rose $3.1 million, primarily from higher legal fees and salary and benefit costs. Excluding litigation-related expenses, Boston Beer reported second-quarter non-GAAP earnings per share of $3.65.

Reynoso said year-to-date pre-tax litigation expenses plus related fees totaled $198.1 million, tied to previously discussed supplier dispute litigation. He said the company intends to pursue available post-trial motions and appellate remedies and does not expect the matter to have a material impact on operating plans.

Koch said Boston Beer’s portfolio continues to lag the pace of improvement in the broader category, with continued market share cha...