Shares of Boston Beer tumbled 21% in premarket trading Friday after disappointing demand for hard seltzer dragged down the company’s quarterly earnings and revenue.
The Sam Adams brewer reported earnings of $4.75 per share on net sales of $603 million. Analysts surveyed by Refinitiv expected earnings of $6.69 per share and revenues of $658 million.
The company laid the blame for the disappointing quarter on softer-than-expected demand for hard seltzer. Boston Beer owns Truly Hard Seltzer, one of the top brands in the category, but new competition and slowing growth were among the factors that hurt the brand’s sales this quarter.
“We overestimated the growth of the hard seltzer category in the second quarter and the demand for Truly, which negatively impacted our volume and earnings for the quarter and our estimates for the remainder of the year,” CEO Dave Burwick said in a statement.
He added that Boston Beer had raised its production of Truly to be able to meet peak demand during the summer. Facing less demand than expected, now its breweries have higher inventory, and the company saw higher supply chain costs that ate into its margins.
The company also cut its full-year forecast for its adjusting earnings per share. It now expects adjusted earnings of $18 to $22 per share for 2021, down from its prior outlook of $22 to $26 per share.
Including Friday’s premarket losses, Boston Beer stock has fallen 25% this year, giving it a market value of $9.1 billion.