• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • About Craft Brewing Business

Craft Brewing Business

Professional Insight, Unfiltered

Craft Brewing Business Craft Brewing Business
  • News
  • Business & Marketing
  • Packaging & Distribution
  • Equipment & Systems
  • Ingredients & Supplies
  • Webinars & White Papers
  • News
  • Business & Marketing
  • Ingredients & Supplies
  • Packaging & Distribution
  • Equipment
  • Webinars & White Papers
  • COVID-19

Craft Brew Alliance shows depletion growth of 6 percent in Q3

November 11, 2014Chris Crowell

Craft Brew Alliance, Inc. (consisting of Widmer Brothers Brewing, Kona Brewing and Red Hook Brewing) reported its financial results for the third quarter ended September 30, 2014. The results for the third quarter are in line with management’s expectations, and the company reconfirmed previously tightened 2014 full year guidance earlier in the quarter.

craft brew alliance“Our third quarter results represent another deliberate step forward in CBA’s long-term quest to continue sustainably growing our topline while driving significant gross margin improvements,” said Andy Thomas, chief executive officer, CBA. “In fact, taking into account the Memphis start-up costs and the tough comparisons over last year’s third quarter, our gross margin rate was in line with our expectations and shows solid growth, allowing us to tighten and even accelerate our long-term gross margin guidance by a full year.”

Significant third quarter and nine months ended financial highlights include:

Depletion volume grew 6 percent from the third quarter in 2013, and 8 percent for the nine months ended compared to the same period last year, which is squarely within our tightened full year depletion growth estimate of 7-9 percent.

Net sales and total beer shipments increased 6 percent and 4 percent, respectively, for the quarter. Nine months ended net sales and total beer shipments grew to 13 percent and 11 percent, respectively, over the same period of 2013.

The third quarter gross margin rate declined 200 basis points to 28.1 percent from the third quarter in 2013, primarily due to startup costs associated with the launch of Memphis operations. The impact of decreased production, as a result of using buffer stock brewed in the second quarter to cover any challenges as Memphis started up, and higher shipment costs represented approximately $1.4 million, or $840,000 after tax. This resulted in a negative impact on our gross margin of 270 basis points for the quarter.

The gross margin rate for the first nine months improved 80 basis points to 29.5 percent over the same period of 2013, reflecting the improved operating efficiencies in our breweries during the first half of the year. The benefit from the improved efficiencies were partially offset in the third quarter by the additional costs related to initiating brewing in Memphis that, for the first nine months of 2014, totaled approximately $0.7 million, or $420,000 after tax, and had a negative impact on our gross margin of 50 basis points.

As a percentage of net sales, the company’s selling, general and administrative expense (SG&A) increased to 26 percent in the third quarter, compared to 24 percent for the third quarter of last year. SG&A growth of 12 percent to $40.8 million for the first nine months of 2014 reflects the planned increases in SG&A spending, primarily for Kona television advertising in select markets.

In addition, the CBA announced that Mark Morelandwill be transitioning out of the role of chief financial officer at the end of the year. He will remain as a senior consultant to the company through the first half of 2015.

CBA investor analysis
Craft Brew Alliance on 2013 earnings, international moves, SKU rationalization
Craft Brew Alliance Q3
Craft Brew Alliance grows depletions by 14 percent year over year
Craft Brew Alliance CBA 2013 Outlook Confirmed
Craft Brew Alliance confirms 2013 outlook after depletions growth in Q2 2013
Craft-Brew-Alliance
Craft Brew Alliance sees depletion growth of 11 percent in 2013

Reader Interactions

Comments

  1. SteveHenneke says

    November 12, 2014 at 7:15 pm

    RT @mrbrewreview: Craft Brew Alliance earnings report for third quarter 2014 http://t.co/gbf3uj1KO8 via @craftbrewingbiz

    Log in to Reply
  2. DenverBeerGuy says

    November 12, 2014 at 6:18 pm

    RT @mrbrewreview: Craft Brew Alliance earnings report for third quarter 2014 http://t.co/gbf3uj1KO8 via @craftbrewingbiz

    Log in to Reply
  3. mrbrewreview says

    November 12, 2014 at 6:10 pm

    Craft Brew Alliance earnings report for third quarter 2014 http://t.co/gbf3uj1KO8 via @craftbrewingbiz

    Log in to Reply
  4. BeerBrosBlog says

    November 11, 2014 at 3:11 pm

    RT @crsimp01: Craft Brew Alliance earnings report for third quarter 2014 http://t.co/4wXteHstGc via @craftbrewingbiz

    Log in to Reply
  5. DenverBeerGuy says

    November 11, 2014 at 3:08 pm

    RT @crsimp01: Craft Brew Alliance earnings report for third quarter 2014 http://t.co/4wXteHstGc via @craftbrewingbiz

    Log in to Reply
  6. crsimp01 says

    November 11, 2014 at 3:00 pm

    Craft Brew Alliance earnings report for third quarter 2014 http://t.co/4wXteHstGc via @craftbrewingbiz

    Log in to Reply
  7. ARbeerworld says

    November 11, 2014 at 2:23 pm

    RT @CraftBrewingBiz: Craft Brew Alliance shows depletion growth of 6 percent in Q3: http://t.co/mtgnyPHfSy

    Log in to Reply
  8. DenverBeerGuy says

    November 11, 2014 at 2:18 pm

    RT @CraftBrewingBiz: Craft Brew Alliance shows depletion growth of 6 percent in Q3: http://t.co/mtgnyPHfSy

    Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Latest News

  • 805 Beer debuts trailer for documentary “Inverted Perspective,” focused on freestyle motocross champion Vicki Golden
  • 10 craft beer variety packs that have us excited to try new beer
  • Stone Brewing teams with Sanuk for a lineup of summer sandals
  • Take a look at Jack’s Abby’s renovated Beer Hall and its sweet new Tradition Meets Tech pilot system

Sign up for our newsletter

unsubscribe from list

Most Popular Today

Recent Features

  • 10 craft beer variety packs that have us excited to try new beer
    March 27, 2023
  • Take a look at Jack’s Abby’s renovated Beer Hall and its sweet new Tradition Meets Tech pilot system
    March 27, 2023
  • CCBA California Craft Beer SummitState of California Craft Beer: Covid recovery challenged by competition, consolidation
    March 23, 2023
  • Koga-brothers-karben4Karben4 Brewing to relaunch Ale Asylum brand
    March 20, 2023
  • 4 steps to understanding the filtration process in craft beer
    March 20, 2023
  • newbelgium_2023_wildnectar-shopping-basket_family_IMG_2Beyond beer: Examples of craft breweries exploring canned cocktails
    March 16, 2023

Footer

  • Email Newsletter Sign Up
  • About Craft Brewing Business
  • Contact Us
  • Advertise on Craft Brewing Business
  • Media Kit Download
  • Privacy and Terms

© 2023 · CBB Media LLC