Shares in Boston Beer Co. plunge amid lower demand in Sam Adams brand

Investing.com - Investing.com -- Shares in Boston Beer Company, the brewer of the popular Samuel Adams brand of craft beer, plunged more than 5% in after-hours trading amid cascading demand in several of its products due to increased competition throughout the industry.
Martin Roper, president and CEO of Boston Beer Company, indicated that the stiff competition has impacted demand for its Samuel Adams Boston Lager, as well as several other seasonal beers, leading the company to revise its full-year depletion growth down to a level between six and nine percent. Previously, the company had anticipation depletion growth between eight and 12%. The drop in demand has been offset by the launch of the brewer's Travelers and Coney Island Hard Root Beer brands, Roper added.
"Both these rollouts are being well-supported by distributors, retailers and drinkers. We are pleased with Traveler's progress this year, but it is too early to tell how successful the Coney Island Hard Root Beer introduction will be," Roper said. "We are planning continued investments in advertising, promotional and selling expenses, as well as in innovation, commensurate with the opportunities and the increased competition that we see."
The Boston Beer Company still increased revenues for the second quarter to $252.2 million, slightly above analysts' forecasts. During the three-month period, its core shipment volume rose 7% to 1.1 million barrels.
The company also saw its net profit increase from $25.4 million or 1.88 per share during the second quarter of 2014 to $29.9 million or 2.18 per share over the previous quarter. Boston Beer's net profits rose as gross margin ticked up 1% to 54% over the last 12 months.
"We believe that craft beer will continue to grow and that we are positioned to share in that growth through the quality of our brands and beers, our innovation and speed to market capability and our sales execution, along with our strong financial position and ability to invest in growing our brands," company founder Jim Koch said in a statement.
"We were delighted to learn that, for the seventh year in a row, our distributors ranked us the number one beer supplier in the industry, in the annual poll of beer distributors conducted by Tamarron Consulting, a consulting firm specializing in the alcohol beverage distribution industry. This is a testament to the efforts of all Boston Beer employees to service and support our distributors' businesses and to the relationships we have built with them."
Shares in Boston Beer Company fell 12.20 or 5.46% to 211.27 in after-hours trading.