The Boston Beer Company, Inc. (NYSE: SAM) reported financial results for the third quarter ended September 26, 2026, disclosing a decrease in net revenue and volume while achieving an increase in gross margin.
For the third quarter of 2026, the company reported net revenue of $520.1 million, a decrease of 3.2% compared to the prior year. Depletions decreased by 5%, and shipments decreased by 4.9% to approximately 1.8 million barrels. Volume declines were driven by Twisted Tea, Truly, and Samuel Adams, partially offset by growth in Sun Cruiser and Angry Orchard. The company noted that distributor inventories as of September 26, 2026, averaged approximately four weeks on hand, lower than the four and a half weeks on hand at the end of September 2025.
Gross margin for the quarter was 51.7%, an increase of 90 basis points year over year. This expansion was attributed to favorable product mix, price increases, procurement savings, and improved brewery efficiencies, partially offset by inflationary commodity and tariff costs. However, the margin included $1.6 million in shortfall fees and non-cash expense related to third-party production pre-payments, which negatively impacted the margin by approximately 31 basis points.
GAAP diluted income per share for the quarter was $4.21, which included non-recurring litigation expenses of $0.16 per share. Excluding these items, non-GAAP diluted earnings per share were $4.37. The company’s effective tax rate for the quarter was 26.7%.
Year-to-date (YTD) through September 26, 2026, net revenue was $1.522 billion, a decrease of 3.6%. YTD gross margin was 50.5%, an increase of 80 basis points. GAAP diluted loss per share was $4.87, which included non-recurring litigation expenses of $14.51 per share. Excluding these items, non-GAAP diluted earnings per share were $9.64.
Regarding capital structure, the company ended the third quarter with $308.1 million in cash and no debt. During the period from December 28, 2025, to October 16, 2026, the company repurchased $79.5 million in shares of its Class A Common Stock. As of October 16, 2026, approximately $149 million remained on the $1.6 billion share buyback expenditure limit.
The company has updated its full-year 2026 guidance. It projects depletions and shipments to be down mid-single digits, with gross margin expected to be 49% to 50%. The company anticipates year-over-year gross margin improvement to be most meaningful in the fourth quarter, driven by lower shortfall fees compared to 2025.
