Boston Beer falls nearly 10% as weak hard seltzer demand forces it to pull earnings guidance
Health conscious American millennials have found their drink of choice: alcoholic carbonated water that is lower in calories and carbs than beer and wine. A hard seltzer craze is sweeping the United States as Generation Y and Generation Z pursue healthier lifestyles, influenced by viral trends on Instagram and YouTube.
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Boston Beer, the parent of alcoholic beverage brands like Samuel Adams and Angry Orchard, pulled its earnings guidance Wednesday amid a big slowdown in sales of its hard seltzer brand Truly.
At the end of July, the company pointed to “decelerating growth trends” in hard seltzer sales to justify its weaker-than-expected quarterly earnings and revenue for the second quarter, which sent its stock tumbling 26% at the time. Those results also led the company to cut its full-year forecast, lowering its expected adjusted earnings to between $18 per share and $22 per share for 2021. Its prior outlook was for a profit between $22 per share and $26 per share.
Shares of the alcoholic beverage company fell 9.8% in after-hours trading.
“The Company now expects to incur hard seltzer-related inventory write-offs, shortfall fees payable to third-party brewers and other costs that will be expensed during the remainder of fiscal 2021,” Boston Beer said Wednesday.
