USA: Craft Brew Alliance reports second quarter and six month results

Craft Brew Alliance, Inc. (“CBA”), a leading craft brewing company, reported financial results for the second quarter and six months ended June 30, 2020 in a Form 10-Q filed with the Securities and Exchange Commission on August 5.

The company’s second quarter performance reflects the continued impacts of the ongoing global pandemic, which forced the shut-down of on-premise bars and restaurants, including its brewpubs, for most of the quarter. Against this backdrop, CBA grew total company packaged shipments 13% over the second quarter last year, driven by strong growth among its core brands in package. Notably, packaged shipments for Kona grew 12% in the quarter, led by robust demand for Big Wave, which grew packaged shipments 15% over the second quarter last year. Kona’s second quarter growth also reflects the addition of new Spiked Island Seltzers, which launched in select test markets earlier this year, including California, where it already ranks in the top 5 brands for velocity.

“Acknowledging the evolving set of challenges facing our industry today, we are especially proud of Kona’s 12% increase in packaged shipments for the quarter. This achievement builds on the momentum we fueled through our marketing investments last year and further validates Kona’s relevance and resilience as a brand that more and more consumers trust during the pandemic,” said CBA CEO Andy Thomas. “Looking ahead at the balance of the year, we remain focused on our priorities, including the completion of our Kona brewery and combination with Anheuser-Busch.”

During the second quarter, CBA continued to actively manage financial health through cost control and tightened spend. While COVID-19’s continued negative effect in the on-premise and draft led to a 9.2% decrease in total company shipments on a year-to-date basis, the brewer’s active management mitigated the impact of this volume de-leveraging on key business metrics, with beer gross margins decreasing only 570 basis points and beer revenue per barrel increasing by more than 1%, compared to the same six-month period last year. These efforts contributed to earnings per share of $0.05 for the first six months, representing an increase of $0.29 per share over the first half of 2019, which was adversely affected by the settlement of the Kona class action lawsuit.

“We’re pleased with our financial performance in the second quarter, which reflects a companywide focus on our core business while tightly managing spend in the face of continued uncertainty related to the pandemic,” said CBA Chief Financial and Strategy Officer Christine Perich. “These efforts have collectively contributed to sustained strong volume growth in the off-premise, while also achieving earnings per share of $0.05 for the first six months. On the people side, we continue to prioritize the health and safety of our teammates, partners and consumers as we closely monitor the evolving situation with COVID-19.”

In light of CBA’s pending combination with Anheuser-Busch InBev, the company have suspended the practice of holding investor conference calls and providing forward-looking guidance. As previously disclosed, following the approval by CBA shareholders, the proposed expanded partnership remains subject to the satisfaction of customary closing conditions, including receipt of requisite regulatory approvals.

06 August, 2020