Company reports record first quarter revenue, but net income is down
The Boston Beer Company, Inc. reported last week a first qaurter increase in core shipment volume of 13.7%, which helped drive a record first quarter revenue of $56.9 million.
The company was also able to implement a price increase of approximately 2% in first quarter 2006 versus same quarter last year.
With all the good news however, came the bad news. Net income decreased in the first quarter by $2.1 million, mainly due to significant increases in production and freight costs, increases in salary and benefit costs and the timing of certain advertising, promotional and selling expenses, according to a company press release.
Distributor sales of the Boston Beer brands to retail (depletions) increased approximately 18% from the first quarter 2005. Jim Koch, Chairman and Founder of the Company, commented, “We are pleased with our first quarter depletions growth which appears to reflect the increased drinker appeal of the Craft beer category that we saw in the second half of 2005. We believe that Samuel Adams is well positioned to continue to grow with the Craft beer category and maintain our leading brand position.”
Martin Roper, Boston Beer President and CEO, said, “While the 18% depletions growth benefited from an extra selling day and easy comparisons to the soft first quarter in 2005, we are optimistic about drinkers’ tastes continuing to move towards more full-flavored, better quality beers, and we believe that the Company has benefited from this trend in the first quarter as well as from our continued investments in brand support and sales people.”