What Happened:

Shares of beer company Boston Beer (NYSE:SAM) fell 15.8% in the morning session after the company reported fourth-quarter results with revenue, and EPS missing analysts' expectations. The topline growth continued to decrease in absolute terms, led by a 9% drop in Depletions (due to declines in Truly Hard Seltzer, partially offset by increases in Twisted Tea and growth in Samuel Adams Non-Alcoholic styles and Dogfish Head Canned cocktails) and a 12.2% drop in Shipments. Free cash flow also came in weaker. Looking ahead, guidance was barely convincing as the company expects Depletions and Shipments to be down low single-digit to up low single digit. Overall, this was a mediocre quarter for Boston Beer.

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What is the market telling us:

Boston Beer's shares are somewhat volatile and over the last year have had 5 moves greater than 5%. But moves this big are very rare even for Boston Beer and that is indicating to us that this news had a significant impact on the market's perception of the business.

Boston Beer is down 10.4% since the beginning of the year, and at $304.76 per share it is trading 22.6% below its 52-week high of $393.71 from October 2023. Investors who bought $1,000 worth of Boston Beer's shares 5 years ago would now be looking at an investment worth $973.06.

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