Shares of Boston Beer Co. fell Wednesday, a day after the brewer slashed its full-year outlook and posted worse-than-expected third-quarter results. The stock fell $2.87, or 7.9 percent, to $33.69. The stock has ranged from $31 to $54.15 over the past year.BBC's been all over the chart, but given the product recall (which, while most everyone agreed was well-handled, still cost them a lot (and no word on whether any costs would be recovered from glass supplier Owens-Illinois)) and the costs of renovating the Lehigh Valley brewery, there was bound to be some backlash. Coming when it did, in the middle of an incredibly volatile market, probably amplified the downward pressure.
Goldman Sachs analyst Lindsay Mann told investors in a research note that the maker of Samuel Adams beer faces a "much tougher" cost outlook in 2009. Late Tuesday, the company said the cost of a product recall and expenses relating to the opening of a new brewery would drag down full-year profit. The company now expects to earn between 60 cents and 80 cents per share for the year, down sharply from the $1.70 to $2 per share it previously predicted.
Mann cut his full-year estimates on Boston Beer for 2008, 2009 and 2010.
Not sure where Mann's "much tougher cost outlook" is coming from, though: energy's down (which means glass should at least stay steady) and the German hops crop is apparently coming through really big (just talked to a brewer friend yesterday who was in Bavaria for the hop harvest). Guess we'll see.
I still think BBC and Sam Adams are sitting pretty. Sammy A is the fall-back, the go-to base beer for many craft drinkers, and as prices go up -- and Sammy A stays relatively steady -- I still see more folks going to them. I know, many beer geeks see it as one tiny step up from Budweiser...lieber Gott...but "many beer geeks" are less than a bump in the road.