SAM reported Q1 2013 EPS of $0.51 vs consensus of $0.64 and $0.56 in Q1 ’12 last night. It had a very healthy 20% top-line gain year-on-year (versus a reasonably difficult comparison) with +1% pricing during the quarter. Ciders and teas offset weakness in Samuel Adams, and SAM sees continued competition from domestic specialty and craft beers. FY EPS guidance was unchanged at $4.70 to $5.10. Great company, great beer - nothing for us do at with this multiple and the stock off 11% today.
What we liked:
- Revenue $135.9 million (vs consensus $131.3 million), a 20% year-over-year increase
- Core shipment volume was approximately 632,000 barrels, an 18% increase compared to Q1 ‘12
- Momentum continues behind ciders and teas
- Maintained full-year gross margin guidance
- FY EPS guidance unchanged at $4.70 to $5.10
What we didn’t like:
- EPS $0.51 vs consensus of $0.64
- Gross margin declined to 50% vs 55% in Q1 ‘13
- In the quarter, advertising, promotional and selling expenses increased $5 million versus the prior year, and FY guidance raised by $18 million to $26 million - the craft segment might be getting a little toppy here
- G&A increased $3.1 million versus the prior year
The company is introducing its Samuel Adams Boston Lager in a can this May, with the new innovation ready for summer occasions where glass bottles are not prohibited. Be on the look out!
HEDGEYE RISK MANAGEMENT, LLC