Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| So it's -- we view it as a place where we can and should play and where we have some real competitive advantages over the entrenched competitors, especially the spirits companies |
| So that's -- I was very happy, and I hope they're right |
| As I look back on our 2023 performance, I'm encouraged that we saw steady sequential improvement in depletions as we move through the year |
| With more consistent and predictable volumes and improved supply chain processes and systems, we have more savings opportunities in waste and network optimization |
| But for me to be happy, personally, I want to see this brand continue to deliver better growth rates, and it has been getting gradually better |
| Gross margins improved by 120 basis points in 2023 and as we made progress on our operating plans to generate procurement savings, improved brewery efficiency, lower waste and optimize our network |
| In the first half of 2024, we are implementing an automated customer ordering and inventory management system, that we believe, along with other improvements in our supply chain processes will help further reduce waste and optimize our network |
| The celebration pack was in T3 and T1 is to get away pack,and we're seeing much better response |
| Diego will provide more details on our gross margin outlook in his remarks and why we feel good about our long-term gross margin potential |
| The multiyear operational improvements we are making in our business together with the diminishing impacts of the contractual items I just discussed, give us confidence that we have a strong pathway to significantly improve our gross margin over time to high 40s to 50% |
| So I think as we go forward, I feel positive that those will help us down the path both again on the operations part of that volume forecast, but also on the branded side of that forecast |
| Our strong balance sheet enables us to invest in our brands and continue to return cash to shareholders with over $128 million in stock repurchased over the last 14 months |
| Overall, I'm confident that our diversified portfolio across categories, strong brand equities and the best sales force in the industry, position us well for long-term success |
| Angry Orchard Crisp Light and others not yet announced, put us in a very strong position to continue to improve our volume trends and return to growth later in 2024 |
| We're building depletions momentum and we believe our focus on Twisted Tea and Truly and an exciting innovation offering across multiple brands, including Sun cruiser, the Hard Mountain Dew rollout into our beer wholesaler network |
| He's built a strong team across the company and his deep beverage industry expertise and brand building and innovation skills have fortified our portfolio to successfully compete in the broader alcoholic beverage environment |
| Dave has positioned the company very well for ongoing success in 2024 and beyond |
| And the last thing I'll just say is as it relates to innovation, we do feel that we're set up we have been a terrific fast forward, and we're set up to do that |
| Our company has exceptional innovation and brand-building capabilities, the top sales organization in beer in a cash-generative business model with an excellent balance sheet to support long-term growth |
| So we feel -- as we end the year, we feel good |
| So -- high we're growing and gaining share in all of those right now |
| It's been my privilege to be connected to the company since I joined the Board of Directors in May 2005, and have greatly enjoyed adding whatever value I could to build our people capabilities and improve our growth prospects over the years, whether as a Board member or in the last six years as CEO |
| So we feel okay with it, and we feel very confident for the reasons Jim mentioned, like the different ways to growth here |
| In summary, we're optimistic about the long-term outlook for our diversified beverage portfolio |
| Meanwhile, Dogfish Head's award-winning can cocktails have gained a solid foothold in the traditional canned cocktail segment, and we have new packaging in the styles, including 12% ABV offerings coming to market in the first half of 2024 to enhance our brand offering and drive growth |
| While currently a small part of our portfolio, we see incremental opportunities in spirit-based RTDs Truly vodka Soda has strong repeat and continues to gain distribution and Truly Tequila Soda had demonstrated good results in test markets in the fourth quarter |
| There is tremendous excitement within our distribution network about this move from Blue Cloud to beer to wholesalers, and we believe it puts us in a great position to expand the reach and consumption of hard do which has demonstrated very strong sales per point and repeat, but has not yet benefited from extensive distribution |
| Boston Beer has a very unique and powerful culture, and I'm confident the organization is in great hands to take advantage of the opportunities ahead of it |
| As Jim mentioned, our fourth quarter volumes showed continued improvement |
| I was very happy to hear that the analytics are probably way better than ours |
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| And then getting to the whole gross margin dynamic, it strikes me as visibility on volume has been pretty weak, and innovation has been such a critical part of Boston Beer's growth historically |
| Shipments were slightly below the midpoint as wholesale inventories declined by one week in the fourth quarter |
| In the fourth quarter in measured off-premise channels Truly's dollar sales declined 22% and a last $2.9 share points versus a 27% decline in dollar sales and a loss of $3.4 share points for the full year of 2023 |
| In terms of beer category growth, I think we've seen some slowdown in the first eight weeks of this year |
| Additionally, to the extent we experienced significant growth in partnership brands and variety packs, there will be some mix headwinds |
| Fiscal calendar shipment volumes for the quarter was approximately 1.5 million barrels, a 12.2% decrease from prior year |
| Together, these contractual items negatively impacted gross margins by 185 basis points in 2023 and are expected to have 175 to 225 basis points negative impact in 2024 |
| On a 13-week comparable basis, Shipments decreased 3.5% in the fourth quarter |
| We expect to cover commodity inflation dollars with pricing and expect some additional margin headwinds from higher labor costs in our breweries in 2024 |
| The category growth has dropped a bit from a reasonably strong finish to 2023 |
| Non-GAAP EPS of $7.17 was at the lower end of our guidance due to the volume impact of lower than estimated wholesaler inventories at year-end and a fourth quarter income tax adjustment |
| In addition, as previously discussed, before the decline in volumes related to hard seltzers in the second half of 2021, we entered certain contractual agreements to access third-party production capacity, which continued to impact our gross margin |
| We delivered depletions down 6% for the year, which was at the midpoint of our guidance |
| I think as we mentioned before, one of the things that we saw was wholesaler inventories being lower than we expected, and that was specifically in the last couple of weeks of the year |
| We experienced volume declines in 2023, and our margin guidance for 2024 reflects a range of potential outcomes for volume |
| We will be south of that maybe worse than my understanding |
| My -- the numbers we're looking at is maybe 1.5% slowdown in the category in the last eight weeks, maybe two, that order of magnitude and maybe one third of that is the dry January |
| Fiscal calendar depletions for the quarter decreased 9% from the prior year |
| The transitory phenomenon are the continued leakage out of the beer category as a result of the Bud Light issues from our numerator data, obviously, some of that went to -- stayed within the beer category, you might have gone to most of Coors or some of that may be Molson Coors or some to maybe Pabst and Yangling, but a fraction of it left the beer category, either for spirits or just know no alcohol consumption |
| As you model out the year, please keep in mind that our business is impacted by seasonal volume changes with the first quarter and the fourth quarter being lower volume quarters and the fourth quarter, typically, our lowest absolute gross margin rate over the year |
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