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What's in the Offing for Boston Beer (SAM) in Q1 Earnings?

Zacks Equity Research

The Boston Beer Company, Inc. SAM is slated to report first-quarter 2020 results on Apr 22. In the last reported quarter, the company delivered a negative earnings surprise of 12.7%. However, its bottom line beat the Zacks Consensus Estimate by 37.8%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.75, implying a 6.4% decline from the year-earlier quarter's reported figure. Moreover, the consensus mark has moved down 3.8% in the past seven days. For quarterly revenues, the Zacks Consensus Estimate stands at $349.5 million, suggesting 38.9% growth from the prior-year quarter reported figure.

The Boston Beer Company, Inc. Price and EPS Surprise

 

The Boston Beer Company, Inc. Price and EPS Surprise
The Boston Beer Company, Inc. Price and EPS Surprise

The Boston Beer Company, Inc. price-eps-surprise | The Boston Beer Company, Inc. Quote

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Factors at Play

Boston Beer’s top line has been benefiting from sturdy depletions growth, improvement in shipment volumes and efforts to innovate brands. The company’s depletions have been robust on increases in its Truly Hard Seltzer and Twisted Tea brands. Particularly, it is expected to have gained from increased investments in the Truly brand, which has been bolstering its position in the fast-growing hard seltzer category.

Moreover, major innovations, quality of products and strong brands alongside solid sales execution and support from distributors have collectively been aiding depletion. Also, efforts to manage inventory levels are likely to have led to a continued rise in shipments in the first quarter.

However, incremental costs for the use of third-party breweries and the introduction of variety packs have been denting the gross margin. Additionally, higher advertising, promotional and selling expenses along with increased general and administrative costs are expected to have remained a threat to its overall profitability.

Moreover, the company’s results for the first quarter are expected to reflect the impacts of the novel coronavirus outbreak, which has led to the closure of all bars and restaurants since the beginning of March 2020.

Zacks Model

Our proven model predicts an earnings beat for Boston Beer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Boston Beer has a Zacks Rank #3 and an Earnings ESP of 8.94%.

Stocks Likely to Deliver Earnings Beat

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

The Clorox Company CLX has an Earnings ESP of +2.56% and it sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hain Celestial Group, Inc. HAIN currently has an Earnings ESP of +9.24% and it flaunts a Zacks Rank #1.

Kellogg Company K presently has an Earnings ESP of +4.40% and a Zacks Rank #3.

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The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
 
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The Clorox Company (CLX) : Free Stock Analysis Report
 
The Boston Beer Company, Inc. (SAM) : Free Stock Analysis Report
 
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