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Boston Beer at a 52-Week High: An Insight into the Catalysts
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Boston Beer Co. Inc. (SAM - Free Report) has been progressing well with its three-point growth plan, focused on the revival of its Samuel Adams and Angry Orchard brands, cost-saving initiatives, and long-term innovation. The craft beer industry is showing continued signs of expansion. The company is well positioned to capture a larger share of this expansion, given its robust craft beer portfolio.
This is clearly reflected in the stock’s bullish run in the bourses. Shares of the company scaled a 52-week high of $329.6 on Jul 16, before closing a tad lower at $320.10. Also, this Boston, MA-based company’s shares rallied 42.2% in the past three months, substantially outperforming the industry’s 8% decline.
Furthermore, analysts are steadily growing bullish on the stock. This is apparent from rise in earnings estimates. The Zacks Consensus Estimate of $8.08 for 2018 has moved north by 71 cents in the last 30 days. The estimate of $2.89 for the second quarter of 2018 has also increased by 25 cents in the same time frame.
Growth Drivers
The company remains on track with its plans to revive the Samuel Adams brand, through packaging, innovation, promotion and brand communication initiatives. Its latest efforts to improve trends at Samuel Adams comprises 'Fill Your Glass' integrated marketing campaign, alongside sales execution of its Samuel Adams initiative, Sam ’76. After witnessing declines for a few years, the company’s Angry Orchard is witnessing renewed consumer interest, following the launch of ‘Angry Orchard Rose’. The rollout has also accelerated the pace of revival of the overall cider category, which declined about 1-2% at the end of 2017 and has been showing signs of improvement, since then.
The company’s non-beer portfolio is poised to deliver significant depletions growth in the future, driven by expansion of distribution and customer base for the Twisted Tea brand as well as maintaining the Truly Spiked & Sparkling brand’s leadership position in the emerging hard sparkling water category.
In a bid to address industry challenges, the company is focusing on improving its cost structure and efficiency projects, so that these savings can be directed toward further brand development. This has been significantly contributing toward improving gross margin. Gross margin improved 330 basis points (bps) in the first quarter of 2018, driven by better pricing, product and package mix, and favorable fixed-cost absorption, along with cost-saving gains from the company-owned breweries. For 2018, the company expects gross margins between 52% and 54%, driven by continued progress on cost-saving initiatives.
Wrapping Up
Though the above-mentioned strategies bode well for Boston Beer, intense competition in the craft beer space cannot be ignored. Nevertheless, we expect the company’s continued focus on pricing, product innovation and brand development to boost its operational performance.
Looking For Solid Retail Stocks, Check These
Shiseido (SSDOY - Free Report) has a long-term earnings growth rate of 5% and sports a Zacks Rank #1.
MediFast (MED - Free Report) has a long-term earnings growth rate of 15% and sports a Zacks Rank #1.
Pinnacle Foods has a long-term earnings growth rate of 8% and carries a Zacks Rank #2 (Buy).
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Boston Beer at a 52-Week High: An Insight into the Catalysts
Boston Beer Co. Inc. (SAM - Free Report) has been progressing well with its three-point growth plan, focused on the revival of its Samuel Adams and Angry Orchard brands, cost-saving initiatives, and long-term innovation. The craft beer industry is showing continued signs of expansion. The company is well positioned to capture a larger share of this expansion, given its robust craft beer portfolio.
This is clearly reflected in the stock’s bullish run in the bourses. Shares of the company scaled a 52-week high of $329.6 on Jul 16, before closing a tad lower at $320.10. Also, this Boston, MA-based company’s shares rallied 42.2% in the past three months, substantially outperforming the industry’s 8% decline.
Impressively, this Zacks Rank #1 (Strong Buy) stock has also outpaced both the Consumer Staples sector’s decline of 3.5% and the S&P 500’s growth of 3.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Furthermore, analysts are steadily growing bullish on the stock. This is apparent from rise in earnings estimates. The Zacks Consensus Estimate of $8.08 for 2018 has moved north by 71 cents in the last 30 days. The estimate of $2.89 for the second quarter of 2018 has also increased by 25 cents in the same time frame.
Growth Drivers
The company remains on track with its plans to revive the Samuel Adams brand, through packaging, innovation, promotion and brand communication initiatives. Its latest efforts to improve trends at Samuel Adams comprises 'Fill Your Glass' integrated marketing campaign, alongside sales execution of its Samuel Adams initiative, Sam ’76. After witnessing declines for a few years, the company’s Angry Orchard is witnessing renewed consumer interest, following the launch of ‘Angry Orchard Rose’. The rollout has also accelerated the pace of revival of the overall cider category, which declined about 1-2% at the end of 2017 and has been showing signs of improvement, since then.
The company’s non-beer portfolio is poised to deliver significant depletions growth in the future, driven by expansion of distribution and customer base for the Twisted Tea brand as well as maintaining the Truly Spiked & Sparkling brand’s leadership position in the emerging hard sparkling water category.
In a bid to address industry challenges, the company is focusing on improving its cost structure and efficiency projects, so that these savings can be directed toward further brand development. This has been significantly contributing toward improving gross margin. Gross margin improved 330 basis points (bps) in the first quarter of 2018, driven by better pricing, product and package mix, and favorable fixed-cost absorption, along with cost-saving gains from the company-owned breweries. For 2018, the company expects gross margins between 52% and 54%, driven by continued progress on cost-saving initiatives.
Wrapping Up
Though the above-mentioned strategies bode well for Boston Beer, intense competition in the craft beer space cannot be ignored. Nevertheless, we expect the company’s continued focus on pricing, product innovation and brand development to boost its operational performance.
Looking For Solid Retail Stocks, Check These
Shiseido (SSDOY - Free Report) has a long-term earnings growth rate of 5% and sports a Zacks Rank #1.
MediFast (MED - Free Report) has a long-term earnings growth rate of 15% and sports a Zacks Rank #1.
Pinnacle Foods has a long-term earnings growth rate of 8% and carries a Zacks Rank #2 (Buy).
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>