The Boston Beer Company, Inc. SAM reported mixed third-quarter 2026 results, with earnings surpassing the Zacks Consensus Estimate but revenues falling short. Adjusted earnings per share (EPS) of $4.37 beat the consensus estimate of $4.30. The figure increased 2.8% from $4.25 in the year-ago quarter.
Net revenues declined 3.2% year over year to $520.1 million, missing the consensus estimate of $523 million. Lower shipment volumes weighed on sales, while favorable pricing, product mix and improved brewery efficiencies supported profitability.
This Zacks Rank #3 (Hold) company’s shares have gained 8.7% over the past three months compared with the industry’s 4.1% growth.
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SAM Faces Volume Pressure Amid Mixed Brand Trends
Boston Beer's depletions declined 5% year over year. Shipment volumes decreased 4.9% to approximately 1.8 million barrels, reflecting continued weakness across several established brands.
Declines in Twisted Tea, Truly and Samuel Adams were partially offset by growth in Sun Cruiser and Angry Orchard. Sun Cruiser delivered approximately 60% growth in tracked channels during the quarter, while Angry Orchard recorded its sixth consecutive quarter of growth.
Distributor inventories averaged approximately four weeks on hand at quarter-end compared with four and a half weeks in the prior-year period. Management considered inventory levels appropriate.
Boston Beer's Margin Gains Offset Cost Pressures
Gross margin expanded 90 basis points (bps) year over year to 51.7% compared with 50.8% in the third quarter of 2025. Favorable product mix, pricing actions, procurement savings and improved brewery efficiencies supported the increase.
These benefits were partially offset by higher commodity and tariff costs. Shortfall fees and noncash expenses associated with third-party production prepayments totaled $1.6 million, reducing gross margin by approximately 31 bps.
Management highlighted continued progress in its supply-chain transformation. The company produced 98% of domestic volumes internally during the quarter compared with 89% a year earlier.
The Boston Beer Company, Inc. Price, Consensus and EPS Surprise
The Boston Beer Company, Inc. price-consensus-eps-surprise-chart | The Boston Beer Company, Inc. Quote
SAM's Advertising Expenses Remain Steady
Advertising, promotional and selling expenses remained nearly flat year over year at $165.2 million. Freight expenses increased $9.5 million as higher transportation rates outweighed benefits from lower shipment volumes.
General and administrative expenses decreased $2.1 million to $42.9 million, primarily due to lower salary and benefit costs.
Boston Beer Maintains Strong Cash Position
Boston Beer ended the quarter with cash and cash equivalents of $308.1 million and no debt. The company also had $150 million available under its revolving credit facility.
Net cash provided by operating activities totaled $194.2 million during the first 39 weeks of 2026 compared with $230.2 million in the year-ago period. Capital expenditures amounted to $31.2 million, down from $36.7 million.
The company repurchased $79.5 million of Class A common shares from Dec. 28, 2025, through Oct. 16, 2026. Approximately $149 million remained under its board-authorized $1.6 billion share repurchase limit.
SAM Targets Innovation and Market Share Recovery
Management remains focused on improving market share trends and expanding higher-margin product offerings. Sun Cruiser continues to benefit from distribution gains and strong consumer demand, while Angry Orchard maintains positive momentum.
Boston Beer is also expanding its innovation portfolio. Rally Dog Vodka Ade and Lytt Electric Coolers are scheduled for national availability in 2027, creating additional opportunities in emerging ready-to-drink beverage categories.
Meanwhile, management expects modest shipment growth in the fourth quarter, aided by prior-year inventory adjustments and shipment timing. The company anticipates its most pronounced year-over-year gross margin improvement in the final quarter, supported by lower shortfall fees.
SAM Raises Lower End of 2026 Earnings Outlook
Boston Beer revised its 2026 guidance, reflecting continued volume softness alongside improving operational productivity. The company now expects depletions and shipments to decline by mid-single-digit percentages compared with its previous projection of low-to-mid-single-digit declines.
Price increases are likely to be 1-2%. The gross margin outlook was raised to 49-50% from 48.5-50%, supported by productivity savings, improved product mix and lower anticipated tariff costs. Expected tariff expenses were reduced to $18-$22 million from $20-$30 million. Advertising, promotion and selling expenses are likely to remain nearly flat year over year.
Adjusted EPS is now projected at $9-$10.50 compared with the prior range of $8.50-$10.50. The company also lowered its capital spending outlook to $55-$70 million from $60-$80 million.
Stocks to Consider in the Consumer Staples Space
The Chefs' Warehouse, Inc. CHEF, which is a distributor of specialty food products in the United States, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chefs' Warehouse's current financial-year sales indicates growth of 10.8% from the prior-year level. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Utz Brands, Inc. UTZ, which is a leading manufacturer of a diverse portfolio of salty snacks, currently carries a Zacks Rank #2 (Buy). UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for UTZ’s current financial-year sales indicates a rise of 3.7% from the year-ago number.
Darling Ingredients Inc. DAR, which produces sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2.
The consensus estimate for Darling Ingredients’ current financial-year sales is expected to rise 12.2% from the year-ago reported figure. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
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The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).