Boston Beer Company, Inc.

As a reminder, this conference is being recorded. It's now my pleasure 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 second quarter earnings call. Joining the call from Boston Beer are Jim Koch, Founder, CEO, and Chairman, and Diego Reynoso, our CFO. Before we discuss our business, I'll start with our disclaimer. As we state in our earnings release, some of the information we discuss and then 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 is 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 for introductory 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 second 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 half, the overall beer market improved modestly, although demand was uneven throughout the period. The category was nearly flat in the first quarter before softening in the second quarter, with May proving particularly challenging. Trends improved in June as consumer demand benefited from increased drinking occasions, and many more. Beyond Beer continues to outperform traditional beer in volume in measured off-premise channels, decreasing 1% for the first half compared to traditional beer, which declined 4%. We anticipate industry volume headwinds for the remainder of 2026 as consumers remain under pressure from the cumulative effects of Thank you very much. We delivered triple-digit depletion growth in Sun Cruiser, continued growth in Angry Orchard, and strong on-premise results across the portfolio as major events helped drive incremental drinking occasions. However, Twisted Tea and Truly continued to face declines and market share challenges. Our second quarter depletions were down 6% and shipments were down 4.5%. First half shipments at down 5.6%, modestly trailed depletions at down 5%. For the full year, we expect shipments and depletion trends to be broadly aligned. Improvements in our supply chain that we activated in the second half of last year have enabled us to reduce wholesaler inventory levels consistently. to approximately four to four and a half weeks while reducing quarter to quarter variability. These improvements will affect the timing of shipments compared to the prior year across the third and fourth quarters. Diego will provide additional detail on the shipment timing dynamics in his remarks. Thank you for joining us. Thank you for joining us. We have decided to reduce our planned incremental advertising investment range by $20 million by eliminating some lower performing advertising. Even with this adjustment, we continue to invest in our brands at levels well above historical averages, reflecting the meaningful step-up in support we made last year, while continuing to take a disciplined approach to additional investment. We remain focused on delivering our marketing plans through strong partnerships, compelling program, and effective local market activation in partnership with our wholesalers. At retail, we have slightly gained shelf space this year, but 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 Sun Cruiser. On a combined basis, Twisted Tea and Sun Cruiser volume is very slightly positive and revenue is growing year-to-date through 29 weeks. Sun Cruiser is revenue and margin accretive for us and the brand continues to expand distribution and recruit new drinkers. Twisted Tea continues to dominate the malt-based hard tea market with an over 85% share and no single competitor having more than a 5% share. However, Twisted Tea is facing volume and share pressures with lower velocities reflecting broader FMV category headwinds, reduced feature and display activity primarily due to the expansion of of RTD Spirits, and interaction with spirits-based hard teas. The largest volume headwind continues to be concentrated in 12-packs, which have been impacted by reduced displays in the FMB category, together with consumer purchasing behavior away from larger pack sizes. across the Twisted Tea portfolio, Twisted Tea Singles, Twisted Tea Light, and Twisted Tea Extreme all grew share in the FMB category. So far this year, we've increased advertising investment, added new partnerships, launched new pack sizes, and expanded Twisted Tea Extreme offerings and distribution. We are also taking a disciplined test and learn approach to revenue management on the brand, including targeting pricing adjustments and smaller pack size offerings. These initiatives are still in the early stages, and we will continue to assess their impact as we gather additional data. Recent promotional activity included sponsorships of Pardon My Takes Tahoe Week, Barstool's number one sports podcast and Twisted Tea was front and center across all contents during Tahoe Week, including customer merchandise and advertising. Late in the second quarter, we launched a Hispanic podcast. Summer Retail Program across key markets that include Spanish-language sweepstakes and point-of-sale, complementing our Hispanic Summer Media Campaign, and focused on growing household penetration, awareness, and relevance with Hispanic drinkers. Later this quarter, we'll be running our high-performing teardrop National College Football themed ads, complemented by our game day variety packs, college football team-specific packaging, in-store display programs, and always-on media for Twisted Tea Extreme and Twisted Tea Light. Also beginning this fall, we are expanding our partnership with Realtree Camo and will be launching Twisted Tea Realtree Camo themed national packaging and promotion. Sun Cruiser has quickly grown to a top five spirits RTD and is among the fastest growing brands by volume in the category across combined measured on and off premise channels. Built in bars and restaurants, Sun Cruiser is the leading RTD Spirits tea and lemonade brand in the measured on-premise channel where we are continuing to invest. The brand is also seeing strong growth as it further expands in off-premise, with the highest growth in velocity in comparison to leading RTD Spirits tea and lemonade brands. We expect strong distribution gains for Sun Cruiser in 2026, but continue to expect measured channel off-premise data coverage to be lower versus our other brands due to Sun Cruiser's strong presence in on-premise and off-premise independence. Advertising support for Sun Cruiser includes content around the Let the Good Times Cruise media campaign, which includes TV, paid social, and digital advertising, and key influencers and creators. Our key influencers content includes our summer-long partnership with creator TV personality and outdoor enthusiast Dylan Efron, with events and promotions built around the simple idea of enjoying getting outside with friends and drinking Sun Cruiser. Sun Cruiser continues to have a growing media presence in sports this summer, including the PGA, the MLB, the world champion New York Knicks and sponsorship of numerous music concert series. Our multi-year partnership with the USGA made SunCruiser the official ready-to-drink cocktail of two of Galt's most notable championships, the US Open and the US Women's Open. We continue to see strong velocity and distribution opportunities for Sun Cruiser and we're committed to keeping a disciplined level of tea and lemonade styles as we continue to grow our volume. We expect the brand will continue to grow for the remainder of 2026 with further runway for long-term expansion. Turning to Hart Seltzer, Truly has maintained its number two share position in the hard seltzer category. However, volume and share trends remain challenged. Within the Truly portfolio, high ABV Truly Unruly and the Wildberry flavor continue to significantly outperform our other styles. The investments we made in new brand-creative and soccer-related promotions have improved our marketplace presence, particularly in display activity. However, the impact on consumer demand has not yet met our expectations. We are adjusting the level and timing of our investments in Truly as we reassess the most effective approach to accelerating brand performance. We maintain our focus on strengthening the brand and will continue to refine our marketplace approach while taking a disciplined approach to investment. Insider Angry Orchard grew for the fifth consecutive quarter behind our lead styles Angry Orchard Crisp and Crisp Imperial. Chris Imperial Volume has increased more than 60% in the second quarter in measured off-premise channels. Angry Orchard growth is supported by its brand positioning around Don't Get Angry, Get Orchard, a refreshed creative and strong retail programming. Angry Orchard will continue to focus on building the momentum behind its successful Halloween programming and its recently announced partnership with the iconic Scream horror movie series. For our Samuel Adams brand, to support and help celebrate America's 250th anniversary, we launched limited edition retro packaging and drank like it's 1776 retail programming and promotions. In our home market of Boston, we had record sales at our tap rooms this summer as soccer fans from Scotland and all over the world celebrated and discovered Samuel Adams Boston Lager and our Samuel Adams Summer Ale. For our Dogfish Head brand, in the second quarter, we slightly lost share and had our first quarter of decline after four consecutive quarters of growth. We continue to expand Dogfish Head's Grateful Dead beer collaboration and invest behind the Minute Series IPAs while bolstering our connection to music by introducing a new partnership with Rolling Stone Magazine that was activated earlier this quarter and includes event activation and co-branded packaging for 2027. Turning to innovation, we continue to prioritize high-growth, margin-accretive opportunities that complement our core brand portfolio. Sinless Vodka Cocktails have launched in over 30 states and is a full-flavored, liquor-based cocktail with zero sugar and zero carbs and 100 calories per can. We have launched a new RTD cocktail brand named Lit Electric Coolers in over five states. Lit is 15% ABV malt-based and offered in six flavors in a distinctive resealable 6.8-ounce single-serve package. Both Sinless Vodka cocktails and Lit are in the early stages of launch. Thus far, we're encouraged by the positive response from wholesalers, retailers, and drinkers, but sinless and lit are not expected to contribute meaningfully to our 2026 volumes. In closing, while the operating environment remains challenging, we are seeing some signs of improvement in the category and remain focused on building momentum through the balance of the year. We are managing the business with discipline, investing behind our category-leading brands, advancing our innovation agenda, and working closely with our distributor partners to drive long-term value creation. 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 of the second quarter and our 2026 guidance.