Boston Beer Company, Inc.

and welcome to the Boston Beer Company first quarter 2026 earnings call. At this time, all participants are on the listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. If not, I'd like to introduce Mike Andrews, Associate General Counsel and Corporate Secretary. Please go ahead.

Thank you. Good afternoon and welcome. This is Mike Andrews, Associate General Counsel and Corporate Secretary of the Boston Beer Company. I'm pleased to kick off our 2026 first quarter earnings call. Joining the call from Boston Beer are Jim Cook, Founder, CEO, and Chairman, and Diego Reynoso, our CFO. Before we discuss our business, I'll start with our disclaimer. As we stated in our earnings release, some of the information we discussed and that may come up on this call reflects the company's or management's expectations or predictions of the future. Such predictions are forward-looking statements. It's important to note that the company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's most recent 10Q and 10K. The company does not undertake to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. I will now pass over to Jim to share his comments.

Thanks, Mike. I'll begin my remarks this afternoon with an overview of our strategy and operating results before turning the call over to Diego to discuss our first quarter financial results and our financial outlook for the remainder of 2026. Immediately following Diego's comments, we will open the line for questions. In the first quarter, we were encouraged to see some signs of improvement in the total beer and RTG category, which we estimate was flat in volume compared to a decline of 4%, for the full year of 2025. Beyond beer continues to outperform traditional beer in volume in measured off-premise channels with an increase of about 3% for the quarter compared to traditional beer which slightly declined. While these trends represent modest industry progress, we continue to anticipate volume headwinds for 2026 given a dynamic macroeconomic environment and evolving geopolitical developments that may impact consumer spending. With respect to the Boston Beer portfolio, we have not yet fully participated in the improvement in category trends. We are encouraged that Twisted Tea and Sun Cruiser together are growing depletions, driven by the strong performance of Sun Cruiser and some sequential improvement in Twisted Tea. Angry Orchard and Dogfish Head have now experienced four consecutive quarters of growth, however, truly remains a meaningful portion of our mix and continues to lose share. And we've also seen some softness in Samuel Adams and Hard Mountain Dew. Our first quarter depletions were down 4%. As we expected, shipments trailed depletions at down 7%, reflecting first quarter comparisons when distributors built inventory for our Sun Cruiser and truly unruly innovations. Additionally, improvements in the responsiveness of our supply chain to meet consumer demand led to moderately lower distributor inventory of four and a half weeks on hand at the end of the quarter versus five weeks on hand in the prior year period. We continue to make strong progress on our margin enhancement initiatives, delivering 49.3% first quarter gross margin and we're on track to achieve our planned full year 2026 savings. The business is generating strong cash flow and we have repurchased over $30 million in shares year to date. Our priorities for 2026 continue to be supporting our category leading brands to improve market share trends, launching strong innovations and continuing to expand our gross margins. We remain focused on controlling what we can control and executing in the marketplace and I'm confident in our operating plans for the key summer selling season. Incremental advertising support for our brands following a significant step up in 2025 is on track while maintaining flexibility to adjust toward the lower end of our financial guidance range of brand investments as we monitor the energy cost environment. With respect to our full-year outlook, we expect the factors that I discussed on our last call, including tighter consumer budgets, pressure on the Hispanic consumer, and moderation trends to continue. Based on year-to-date depletion trends and our latest outlook for the balance of the year, we are slightly narrowing our 2026 volume range to down low single digits to mid-single digits, from our prior guidance of flat to down mid-single digits. As we look to the summer, we're highly focused on executing our marketing plans with strong partnerships, programming for the U.S. men's soccer team during the World Cup and local market activations. We expect to slightly increase our total portfolio shelf space this spring while we continue to make progress on regaining lost display space. I'll now provide an overview of our brand performance and plans. As I mentioned on our last call, a key priority for 2026 is to improve share trends and grow volume in the hard tea category through progress in twisted tea and the continued expansion of SunCruiser. On a combined basis, TwistedT and SunCruiser delivered depletion volume growth in the first quarter. As a reminder, to the extent that SunCruiser sources volume from TwistedT, this is revenue and margin accreted for us. TwistedT off-premise measured channel depletion trends improved sequentially in the first quarter, but are not yet where we want them to be. channel sales dollars declined 4% in the quarter compared to a decline of 9% in the fourth quarter against more difficult prior year comparisons. Twisted tea continued to gain distribution and shelf space with lower velocities reflecting broader category headwinds, reduced feature and display activity primarily due to the expansion of RTD spirits, and some interactions with spirit-based hard tea. The declines are primarily concentrated in the original lemon tea and variety packs, particularly in 12-pack sizes as previously discussed. Encouragingly, Twisted Tea Extreme and Twisted Tea Light are both growing and gain shelf space in the spring resets. We're seeing much better trends in single serve across the full brand portfolio with which indicates continued consumer engagement with the Twisted Tea brand. So far this year, we've increased advertising investment, added new partnerships, and launched new pack sizes and Twisted Tea Extreme flavor innovation. This summer, we'll be running our high-performing Tea Drop national ads complemented with in-store display programs and always-on banded partnerships, including Bar School's number one sports podcast, Pardon My Take, and with Realtree Camo. Lastly, we continue to increase our investment in Hispanic and Hispanic language brand content, including new media and digital content, to continue to widen the brand's appeal. Our pack-size innovations, including lower-priced .4 packs, a 16-ounce can and a 24-can value pack, and the Twisted Tea Extreme Variety Pack are now in market. While it is still early, we believe these offerings will continue to provide more options for consumers to engage with the brand and benefit volumes over time. SunCruiser has quickly grown to a top five spirits RTDs and is the fastest growing brand in the category by volume across combined measured and off-premise channels. Built in bars and restaurants, SunCruiser is the leading RTD spirits tea and lemonade brand in the measured on-premise channels. On-premise remains a key driver of trial and we are investing in this We expect strong distribution gains for SunCruiser in 2026, but continue to expect measured off-channel, off-premise data coverage to be lower versus our other brands due to SunCruiser's strong premise in on-premise and independence. Advertising support for SunCruiser includes content around the Let the Good Times Cruise media campaign, which includes television, paid social, and digital advertising and key influencers. We will be present where SunCruiser fits into our drinkers' lifestyles, with a particular focus on music and sports. And we recently announced a multi-year USGA partnership, making SunCruiser the official ready-to-drink cocktail of two of golf's most noticeable championships, the U.S. Open and the U.S. Women's Open. The partnership goes live this spring, and programming includes retail and tournament activation, golf media influencers, and experiential marketing programs, as well as wholesaler incentives. SunCruiser will have continued media presence in sports, including the NCAA, the MLB, the NFL, and sponsorship of numerous music concert series. From an innovation perspective, we're maintaining a disciplined range of tea and lemonade styles while expanding package options, including new 19.2-ounce single-serve packages, single-style 8-packs, and tea and lemonade sampler 12-packs. We expect these offerings to broaden drinker occasions and support strong growth in 2026. Turning to hard seltzer, the overall hard seltzer category has continued to improve and grew slightly in dollars in measured off-premise channels for the first quarter, truly has maintained its number two share position in the category. However, share trends remain challenged. Our effort to improve our share during 2026 include investing in new equity-building creative, capitalizing on the U.S. men's soccer team participating in the World Cup, and continuing to expand Truly Unruly. We're continuing to build our communications platform of Make Your Dreams Come Truly while leveraging our U.S. soccer partnership through our Drink Like a Believer program. Drink Like a Believer Commercial activities launched in May and have been well received by major retailers. The programming includes displays and a U.S. soccer collector set of singles, along with a soccer-themed star squad rotator 12-pack and 24-pack. In addition, we will have significant local media and retail programming investment in the 11 host cities. High ABV offerings. continue to be a growth driver in Hart-Seltzer, and truly, unruly, continues to grow both volume and distribution as our second highest volume 12-pack. Insider, Angry Orchard, continues to grow, supported by new positioning, refreshed creative, and strong retail programming, including our St. Patrick's Day-themed promotions and displays in the first quarter. The new Angry Orchard Crisp Imperial 19.2 single-serve cans are a growth driver for the brand, and overall crisp imperial volume has increased more than 40% in the first quarter in measured off-premise channels. For our Samuel Adams brand, we have recently updated our brand messaging around independent since forever and are excited to celebrate America's 250th anniversary this summer. To support our Drink Like It's 1776 retail programming and promotions, we have launched limited edition retro packaging. For our Dogfish Head brand, which returned to growth in 2025 and has grown for four consecutive quarters, we continue to expand Dogfish Head's Grateful Dead beer collaboration and invest behind the Minute Series IPAs. Turning to innovation, we continue prioritize high growth margin accretive opportunities. Our sinless vodka cocktails are full-flavored spirit-based cocktails with zero sugar and zero carbs. With approximately 100 calories per can, it is positioned as guilty of flavor, free of sugar and carbs, and targets incremental consumer segments that complement our core brand portfolio. Sinless was tested in a small number of states in 2025, and expanded to more than 30 states in March. Sinless is in the early stages of launch, and initial feedback from wholesalers, retailers, and drinkers has been positive. In closing, I'm encouraged to see modest improvements in category trends. While the macroeconomic environment remains dynamic, We are focused on executing our operating plans for the upcoming summer season. We're acting with urgency to leverage the strengths of our brands, our innovation capabilities, and our distributor relationships to improve performance and drive long-term value. I'd like to thank our Boston Beer Company team and our distributors and retailers for their continued support. I'll now pass the call to Diego for a detailed review