Boston Beer revenue falls 3.2%, company raises lower end of annual adjusted earnings forecast
Key Facts
Boston Beer reported a 3.2% year-on-year decline in net revenue to $520.1 million in the third quarter of 2026, in results showing continued sales contraction alongside an improvement in gross margin. The company said in its quarterly earnings statement that shipment volume fell 4.9% from the same period a year earlier, outpacing the revenue decline. Distributor sales to retail outlets fell 5% during the quarter, with lower company shipments coinciding with weaker sales at the next stage of the distribution chain. Adjusted diluted earnings per share were $4.37 for the period, according to the statement, which also included an update to fiscal-year guidance. Actual gross margin was 51.7%, compared with 50.4% in the second quarter, reflecting a quarterly margin improvement despite the continued annual revenue decline. Boston Beer ended the quarter with $308.1 million in cash, according to the figures released with its results.
Revenue weakness extended to earlier periods of the year. In the first quarter of 2026, Boston Beer recorded net revenue of $433.9 million, down 4.4% from the corresponding period a year earlier. Second-quarter net revenue then reached $568.3 million, a year-on-year decline of 3.3%, according to the company's statement for that period. The pace of annual revenue declines thus narrowed across the reported quarters, while sales remained below their year-earlier levels. Chairman and Chief Executive Jim Koch said in an April disclosure that "our portfolio has not yet fully kept pace with the improvement in category trends," referring to the beer category. On costs, the company's filings with the U.S. Securities and Exchange Commission showed that freight expenses for shipments to distributors rose $11.1 million year on year in the first half of 2026. The company attributed the increase primarily to higher freight rates, partly offset by lower volumes, leaving it facing transportation rate pressures alongside declining volumes during the first half.
In its annual guidance update accompanying the third-quarter results, Boston Beer set its adjusted earnings per share range for fiscal 2026 at $9.00 to $10.50. In its July disclosure, the company had forecast adjusted earnings per share of $8.50 to $10.50, meaning the latest revision raised only the lower end while leaving the upper end unchanged. It also lowered its estimate for annual tariff costs to between $18 million and $22 million, compared with a range of $20 million to $30 million in the July update. The tariff estimate reduction covered both ends of the previous range, alongside the increase in the floor of adjusted earnings guidance for the same fiscal year. By contrast, the company expects to report an annual loss per share under accounting standards of $4.26 to $5.76. The guidance puts expected annual results on either side of profit and loss depending on the measure used, with a profit per share forecast on an adjusted basis and a loss on an accounting basis.
For its operating outlook, Boston Beer lowered its fiscal 2026 forecasts for shipments and distributor sales to a mid-single-digit percentage decline. The revision covers both shipments and distributor sales to retail outlets, alongside the declines recorded in both measures during the third quarter. The annual update thus combines a higher floor for adjusted profitability with lower volume forecasts, while activity is still expected to contract for the full year. For the fourth quarter of 2026, the company said it expects "modest shipment growth," following the decline recorded in the third quarter. That estimate puts a return to shipment growth in the final period of the year within the company's expectations, while its full-year guidance for shipments and distributor sales remains for a decline.