Boston Beer shipped 4.5 percent less beer, and a supplier judgment is still what separates its profit from its loss

The reported earnings figure is not the operating story here. Boston Beer earned $4.96 a diluted share in the second quarter, and $1.31 of that came from a favorable adjustment to litigation expense in a supplier dispute the company is contesting.

Volumes fell. Depletions, the measure of what distributors sold on, decreased 6 percent from a year earlier, and shipments fell 4.5 percent to about 2.0 million barrels. The company named declines in Twisted Tea, Truly, Samuel Adams, Hard Mountain Dew and Dogfish Head, partly offset by growth in Sun Cruiser and Angry Orchard. Net revenue was $568.3m, down 3.3 percent, which Boston Beer attributed to lower volume against favorable product mix and pricing. Distributor inventories averaged about four and a half weeks on hand, unchanged from the end of June 2025.

Gross margin was 50.4 percent, up 60 basis points from 49.8 percent, on brewery efficiencies, mix, procurement savings and price increases, against inflation, commodity and tariff costs. Advertising, promotional and selling expenses rose $26.2m, or 16.4 percent, of which $17.5m was local brand marketing and point of sale investment and $8.6m was higher freight rates.

The litigation runs the other way across the half. In the quarter Boston Beer recorded a litigation reduction of $19.4m, being a favorable adjustment to pre-judgment interest of $21.1m against $1.7m of post-judgment interest expense, worth $1.31 a share after tax. Year to date the same dispute has cost $14.27 a share, which is why a company reporting non-GAAP earnings of $5.28 for the first half reports a GAAP loss of $8.99. The combined pre-tax judgment and pre-judgment interest total $191.0m, on which post-judgment interest accrues at an estimated statutory rate of 3.79 percent through the appeals process. The company says it continues to deny that it breached the supplier contract and intends to pursue all available post-trial motions and appellate remedies, and that it cannot estimate when or whether damages or interest will be paid.

Cash was $265.5m at the end of the quarter, with no debt. Boston Beer repurchased $54m of stock between December 29, 2025 and July 17, 2026. The effective tax rate was 28.7 percent, or 30.1 percent excluding the litigation item, against 28.1 percent a year ago.