Key Highlights

  • Net Revenue fell 3.2% to USD 520.1 million; shipments fell 4.9% to 1.8 million barrels.
  • Gross Margin rose 90 basis points to 51.7%, the highest quarterly level since 2017.
  • Non-GAAP Earnings were USD 4.37 per share; GAAP earnings were USD 4.21.
  • Full-year non-GAAP earnings guidance was raised to USD 9.00 to USD 10.50.

Quarter Results

Boston Beer (NYSE:SAM) reported third-quarter 2026 results on Thursday for the 13 weeks ended Sept. 26. Net revenue fell USD 17.4 million, or 3.2%, to USD 520.1 million, as lower volumes outweighed favorable mix and pricing. Net revenue per barrel rose 1.8% to USD 282.51. Depletions fell 5%, against a decline of about 3% for the broader beer and beyond-beer market.

Operating income was USD 56.3 million against USD 62.0 million. Net Income was USD 43.2 million, or USD 4.21 per diluted share, against USD 46.2 million, or USD 4.25. Non-GAAP earnings were USD 4.37 per share, excluding USD 0.16 of litigation expense tied to a supplier dispute.

Margin Drivers

Gross margin of 51.7% was up 90 basis points. Internal production supplied 98% of domestic volume, against 89% a year earlier, a shift management linked to brewery efficiencies that helped absorb higher aluminum, energy and Tariff costs. Freight cost USD 9.5 million more, with rates up more than 50%, and Advertising fell USD 9.0 million as spending moved away from underperforming Truly campaigns.

CEO Jim Koch said Sun Cruiser grew 60% in tracked channels and has become a top-four spirits ready-to-drink Brand in about two years. Twisted Tea holds 85% of the malt-based hard tea category. Truly remains the second-largest hard seltzer brand despite Volume pressure, and retailer display attention has moved toward spirits-based drinks, which weighs on the 12-pack format. Koch cited higher gas prices and cumulative Inflation as pressure on beer demand.

Year-to-Date Litigation Effect

Nine-month results include USD 194.5 million of litigation expense, or USD 200.3 million with related legal fees, which the company puts at a USD 14.51 per share reduction in GAAP earnings. The nine-month net loss was USD 50.5 million, or USD 4.87 per share, against net income of USD 131.0 million, or USD 11.82.

Repurchases totaled USD 79.5 million through Oct. 16, leaving about USD 149 million under the authorization. Distributor inventory was four weeks, against 4.5 weeks a year earlier.

Full-Year Guidance

Depletions are guided down mid-single digits, the low end of the earlier range. Gross margin is guided at 49% to 50%, 50 to 150 basis points higher than last year. Non-GAAP earnings are guided at USD 9.00 to USD 10.50, with the low end raised from USD 8.50. Tariff costs are projected at USD 18 million to USD 22 million, down from USD 20 million to USD 30 million, and capital expenditures at USD 55 million to USD 70 million, down from USD 60 million to USD 80 million. Price increases are projected at 1% to 2%.

The company plans to launch Rally Dog, a 5% ABV vodka-aid product, and LYTT, a 15% ABV malt-based drink, nationally in 2027.

Gauges to Watch

Net income fell 6.5% against a 5% depletion decline, with gross margin gains offsetting volume. The guided depletion trend is the low end of earlier guidance while the earnings range moved up at the bottom. Reference points are Sun Cruiser growth, Truly's trajectory, freight costs, tariff costs against USD 18 million to USD 22 million, litigation developments and repurchases against the remaining USD 149 million.