- Gross Margin Expansion: Achieved 410 bps expansion to 48.5% in 2025, driven by efficiency gains and productivity initiatives, with 2026 guidance of 48ā50%.
- Sun Cruiser Growth: Launched as a top-5 national brand within 1.5 years, contributing to revenue and margin growth, with plans for further distribution and innovation in 2026.
- Depletion Trends: 2025 depletions down 4% (in line with industry), with 2026 guidance of flat to down mid-single digits due to ongoing economic and volume headwinds.
- Savings Initiatives: Generated $80M in cost savings (2025ā2026) from supply chain efficiencies, including 71% reduction in obsolete inventory in Q4 2025.
- Category Diversification: Beyond Beer category (Sinless, Sun Cruiser) positioned as long-term growth driver, with 2026 expansion into new states and partnerships like WWE and DraftKings.
Operational Highlights
The company's disciplined execution and supply chain efficiencies enabled it to meet or exceed its financial commitments. Depletions decreased by 6% in the fourth quarter, and shipments decreased by 7.5% year-over-year, primarily driven by declines in Twisted Tea, Truly Hard Seltzer, and Sam Adams brands. However, the company saw growth in Sun Cruiser, Angry Orchard, and Dogfish Head brands. The company's gross margin expansion was driven by efficiency improvements across its breweries and productivity agenda.
Guidance and Outlook
For 2026, the company expects flat to down mid-single-digit depletions and shipments, with a 3% decline in fiscal week depletion trends for the first 8 weeks of 2026 compared to 2025. The company is guiding for a 1-2% price increase and some additional benefit mix. The company's 2026 guidance includes reported gross margins between 48% and 50%. Analysts estimate next year's revenue growth at 1.3%.
Valuation
With a P/E Ratio of 21.33 and an EV/EBITDA of 10.09, the company's valuation appears reasonable considering its growth prospects. The company's ROE of 12.16% and ROIC of 10.74% indicate a strong ability to generate returns on equity and invested capital. As Jim Koch noted, "We're oriented to drive growth, and decline isn't cheap either." The company's strategy to drive growth through innovation and brand investment is expected to continue, with a focus on scaling Sun Cruiser and expanding the distribution of Sinless vodka cocktails.
Key Drivers
The company's key drivers include the continued growth of its Beyond Beer category, where it is the industry's second-largest player. The company expects to drive margin improvement through productivity and is investing in its brands through advertising and local in-market execution investments. The company's sourcing of aluminum is through contracts with suppliers that have a pass-through of the Midwest premium, which will help mitigate the impact of tariffs.