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The company’s second-quarter results, announced Thursday night, were lower than analysts’ expectations and stocks fell nearly 20% in pre-market trading. Boston Beer has consistently exceeded analysts’ earnings expectations in recent years due to the strength of Truly’s sales, so the low earnings have been a bit of a shock.
CEO Dave Burwick said in a statement that the company “overstated the growth of the seltzer category in the second quarter and demand for Truly, which negatively impacted our volume and earnings for the quarter and our estimates for the rest of the year “.
Truly’s drop in sales follows its biggest marketing campaign, starring pop star Dua Lipa. The company used its star power to compete with White Claw, the enduring market leader in the spiked salt category. Together, the two brands capture about 75% of the hard salt market, according to Nielsen.
The Truly brand has taken a share of the White Claw hard salts market over the past 12 months. Its market share is now less than 10% of White Claw, up from over 20% last year, “thanks to strong and impactful flavor innovations that help reach new black and Hispanic consumers to expand household penetration. “Laurent said. Grandet, analyst at Guggenheim Securities.
Grandet remains optimistic on Boston Beer despite the slowdown in category sales “faster than expected”. He wrote in a note that the drink is “still a segment that is growing faster than any other in the beer business” as customers still prefer the low-calorie drink as an alternative to beer.
Truly’s flavor portfolio has blossomed to nearly 30, ranging from iced tea to fruit punch.
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