Greetings and welcome to The Boston Beer Company Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). And as a reminder, this conference is being recorded.

It is now my pleasure to introduce to you, Mike Andrews, Associate General Counsel and Corporate Secretary. Thank you, Mike. You may begin.

Michael G. Andrews - Associate General Counsel and Corporate Secretary

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 2022 third quarter earnings call. Joining the call from Boston Beer are Jim Koch, Founder and Chairman; Dave Burwick, our CEO; and Frank Smalla, 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 discuss 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 10-Q and 10-K. 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 it over to Jim for some introductory comments.

Jim Koch - Founder and Chairman

Thanks, Mike. I'll begin my remarks with a few introductory comments and then hand over to Dave who will provide an overview of our business. Dave will then turn the call over to Frank, who will focus on the financial details of our third quarter results as well as our updated outlook for the remainder of 2022. Immediately following Frank's comments, we'll open up the line for questions.

This quarter our depletions declined 6%, which is slightly better than our year-to-date trend of down seven. We grew revenue for the second quarter in a row, driven by the continuing growth of Twisted Tea, while improving our wholesaler service levels and reducing out of stocks. Towards the end of the third quarter, we reached our current target wholesaler levels and currently have the best wholesaler service levels since 2000. Declines in the Hard Seltzer category and Truly continue to negatively impact our business. The Hard Seltzer category in measured off-premise channels is down 15% on a volume basis through the first nine months of 2022 with Truly down 21%.

We are working to improve Truly trends through a major product reformulation, including the addition of real fruit juice and sharpening our brand communication and increasing our media investment. Early in the fourth quarter, we launched Truly Vodka Seltzer and early response from wholesalers retailers and drinkers has been positive. With the launch of Truly Vodka Seltzer along with our award winning Dogfish Head Can cocktails. We believe we are positioned well in the emerging ready to drink spirits category, which has been growing 79% in measured off-premise channels through the first nine months of 2022.

For the remainder of the year and into next year, our strategy is to gain market share in the Beyond Beer category, where we are currently a strong number two. Beyond Beer is growing faster than the traditional beer market and we believe that this trend will continue for the next several years. Our multi-brand strategy plus our long history of innovation have supported our growth over the long-term and we will work hard to capitalize on these strengths going forward. We're thankful to our outstanding coworkers, distributors and retailers who continue to support our business.

I'll now pass it over to Dave for a more detailed overview of our business.

David A. Burwick - Chief Executive Officer

Okay. Hey. Thanks, Jim. Hello, everyone. Our long-term goal is to become the number one player in the fast growing Beyond Beer segment by creating a broad relevant brand portfolio that enables many pathways to growth. We have the number one FMB and Twisted Tea, the number two Hard Seltzer and Truly and the number one Hard Cider and Angry Orchard.

In the near term, our priorities are continuing focus on fueling Twisted Tea, supporting the launch Dogfish Head Can cocktails and working to stabilize Truly trends. We're also experimenting implanting new seeds in our research-to-cultivate new contributors to our future growth. Our third quarter depletion trends reflected continuing growth in Twisted Tea and positive contributions from Hard Mountain Dew offset by declines in other brands primarily Truly Hard Seltzer. Excluding the declines in Truly, our depletion volumes increased 14% in the third quarter and 12% for the first nine months.

I'll say more about Twisted Tea in a moment, but first let's talk about Truly. Hard Seltzer volume declined by 17% in the third quarter and measured off-premise channels. We believe there are four primary drivers of the continued decline. First, Hard Seltzers is lost its novelty as consumers have been distracted by many new Beyond Beer products entering the hyper-crowded marketplace.

Second, the large amount of Hard Seltzer SKUs has caused consumer confusion and makes the segment hard to shop. Third, no one is communicating the core category benefits of refreshment, easy to drink and variety. Lastly and partially tied to the macroeconomic environment, we're seeing a volume shift from Hard Seltzers back to premium light beers with their lower pricing, particularly among 45 plus year old's. Whether this continues into the future reverts back is still to be determined. The Truly brand has not yet overcome these headwinds Truly volume in measured off-premise channels declined in the third quarter by 25% and a loss 2.8 share points compared to the third quarter of 2021. Our Truly innovation has been well received by consumers as Margarita remains the number one innovation year-to-date in all of beer with the 4.1 volume share of Hard Seltzer. However our existing flavors have not yet stabilized, as consumers easily adopt what's new and interesting. Despite the current headwinds, Truly household penetration remains strong across all age groups and is number one in all of beer among 21 to 34 year old's for the 52 weeks. As I had mentioned on our last call, we're reformulating all Truly's flavors by adding real fruit juice for an even smoother easy to drink and refreshing taste profile. Reformulated Truly variety packs are in the market now and supported by a new Ad campaign, focused on the flavor improvement, a significant investment in shopper marketing activity and other promotional programs to drive volume.

We've received favorable response from consumers retailers and wholesalers to these changes with the product has only been in market for a short time and the full business impact will be felt over the longer term. With respect to innovation, there is significant wholesaler and retailer excitement around Truly Vodka Seltzer which we launched earlier this month. Our Truly flavored bottle vodka which has been sold by Beam Suntory since late in the first quarter, has been well received by consumers. It's the number one new innovation and full bottles spirits in 2022 and we believe it's success bodes well for the Truly Vodka Seltzer watch.

We continue to believe Hard Seltzers will remain an important beer industry category in the future, but the trajectory of the category in the near-term remains unclear. While the Hard Seltzer segment was $9.8% of total beer dollars in the third quarter of 2022, it's down from $11.4% in the third quarter of 2021. Consequently, as we look at our forecast for Hard Seltzer category growth for the year, we continue to believe the category volume will decline between 15% and 20%.

Regardless of where the category growth settles in 2022 and future years, our longer-term goal is to outgrow the category and improve our Truly brand trends, driven by a reformulation of all flavors along with brand investments. Smart, brand innovation and strong distributor support in retail execution.

Let me turn now to our other brands, beginning with Twisted Tea our growth reader. Twisted Tea is an unique product with brand positioning that resonates with more and more consumers. In the third quarter and measured off-premise channels Twisted Tea expanded its position as the Number one FMB by gaining 4.3 share points over its position at the end of the third quarter of 2021 and had a 7.2 Share Point lead over the number two F&B brand. It again grew double-digits, driven by improved distribution of 12 packs. Twisted Tea has been growing double digits for 20 years now of a larger and larger base and there is clear evidence we can sustain a healthy growth rate.

We improved our service levels and reduce out of stocks during the third quarter compared to the first half, which help support this growth. In measured off-premise channels Twisted Tea has been the fastest growing brand among the top 20 and all beer for the past 12 months, since volume growth has accelerated from 24% year-to-date to 33% and the latest is 13 weeks. Twisted Tea is 24-ounce can is the fourth largest volume, single-serve beer brand nationally, underscoring its residents with convenience store shoppers. This is despite many competitive offerings entering the market and as a testament to the brands growing following and the potential upside that remains as we close brand awareness and distribution gaps across the country, because of its growing 12 pack distribution, the brand is receiving strong retailer support including expanded promotional and display activity. In addition– additionally to support pull, we're advertising the brand year round to increase brand awareness and have received strong response from consumers to our current tea-drop advertising campaign in our large college football themed initiative, building significantly on our activities for 2021.

In the nine states where it's been launched Hard Mountain Dew is showing good promise with a 12 share of FMB's in the measured off-premise channels where it's distributed in those markets. We will continue to roll the brand out an expected to launch up to two additional states later in 2022. In the first nine months, our Samuel Adams brand depletions were down low-single digits. But the brand did produce growth and seasonals and craft and held share flat in a difficult craft beer market.

“To Your Cousin From Boston” campaign is continuing to attract younger drinkers. In addition, we are seeing growing trends in our emerging Non-Alcohol business, we're Samuel Adams just the hays won the gold medal in the Non-Alcohol category at the Great American Beer Festival. Meanwhile Angry Orchard remains the number one brand in Hard Cider with a 46 share of the segment in measured off-premise channels.

Angry Orchard Brand depletions are down consistent with low double-digit declines in Cider category trends. Total Dogfish Head brand depletions in the third quarter also declined against difficult craft beer market. However, our expanded lineup of award-winning Dogfish Head Can cocktails including the 8-pack bar cart variety pack, grew depletions significantly in the third quarter off a relatively small base. Dogfish Head Can cocktails are gaining share and are now the sixth largest can cocktail brand in measured off-premise channels.

Turning to our supply chain performance, we're continuing our efforts to improve our supply chain performance and inventory management. We believe our investments in equipment, capacity, improved systems and processes will help improve our gross margins and continued to improve our service levels over the coming years. In the third quarter, while we saw margin expansion year-over-year it was lower than planned due to higher inventory obsolescence, primarily driven by the Truly product transition and the continued slow ramp-up of line efficiencies in our internal breweries. As a result we updated our guidance for gross margins for the full year 2022. As I mentioned earlier, we're working hard in our supply chain transformation initiatives and are committed to improving gross margins over time.

In summary, despite near term headwinds, were optimistic about the long-term outlook for our diversified beverage portfolio. We continued to recover from the slowdown in the Hard Seltzer segment that experienced unprecedented growth up to the second half of 2021 and are now experiencing change in consumer demand as the environment becomes more normalized. Our company has proven innovation and brand building capabilities, the top sales organization in beer and a cash generative business model with an excellent balance sheet to support long-term growth, even as we navigate some challenges in the near term.

Now, I'll hand over to Frank to discuss third quarter financials. As well as our outlook for the remainder of 2022.

Frank H. Smalla - Chief Financial Officer

Thank you, Dave. Good afternoon, everyone. For the third quarter, reported net income of $27.3 million or $2.21 per diluted share compared to a net loss of $58.4 million of $4.76 per diluted share in the third quarter of 2021. This increase of $85.7 million or $6.97 per diluted share was due to lapping the 2021 combined direct and indirect costs related to the 2021 slowdown in Hard Seltzer category growth as well as increased net revenue and lower advertising promotional and selling expenses, partially offset by increased income taxes and non-cash impairment charge in the current quarter and increased supply chain costs.

In the third quarter, we recorded a $27.1 million non-cash impairment charge for the Dogfish Head brands as a result of the company's annual impairment analysis. The impairment determination was primarily based on the latest forecast of brand performance, which has been below our initial projections made at the top of the transaction. We believe there is strong potential for future brand growth, particularly in the canned cocktails category, which is in its early stages of development and will remain committed to grow the Dogfish Head brand overall.

The third quarter continued to show sequential shipment and revenue improvement and generated over $100 million in operating cash flow, following the strong second quarter cash flow performance. However, the volume performance primarily related to Truly and the corresponding inventory obsolescence continue to negatively impact gross margins.

Shipment volume for the quarter was approximately $2.3 million barrels. The $1.4% increase from the prior year, reflecting increases in the company's Twisted Tea, Hard Mountain Dew and Samuel Adams brands, partially offset by decreases in our Truly Hard Seltzer, Angry Orchard and Dogfish Head brands. We believe distributor inventory as of September 24, 2022 averaged approximately five weeks on hand and was at an appropriate level for each of our brands.

We expect distributors will keep inventory levels for the remainder of the year between four and five weeks on hand. Our third quarter 2022 gross margin of $43.2% increased from $30.7% margin realized in the third quarter of 2021 primarily due to lapping prior year costs related to the 2021 Hard Seltzer slowdown, partially offset by higher inventory obsolescence, costs and returns. The higher obsolescence costs were primarily related to the recent Truly product reformulation and lower than expected shipments. Inflationary cost increases primarily due to increased packaging, ingredient and energy costs were offset by increased pricing with a net neutral impact on gross margin. Our third quarter advertising promotional and selling expenses decreased $13.1 million or $7.9% from the third quarter of 2021 primarily due to a net decrease in brand investments of $9.5 million, mainly driven by lower media costs and decreased freight to distributors of $3.6 million primarily due to lower freight rates.

General and administrative expenses increased by $5.3 million or $16.6% from the third quarter of 2021 primarily due to increased salaries and benefits costs. Our depletions and shipments for the first 42 weeks of 2022 have each declined 6% from the comparable period in 2021. Based on our year-to-date performance and current projections for the fourth quarter, we are narrowing our full-year 2022 earnings guidance per diluted share to between $7 and $10 from between $6 in $11.

This projection excludes the impact of the non-cash impairment charge of $27.1 million or $1.61 per diluted share and is highly sensitive to changes in volume projections, particularly related to the Hard Seltzer category. Supply chain performance and inflationary impact on consumer spending, the 2022 fiscal year includes 53 weeks compared to the 2021 fiscal year, which included only 52 weeks.

Full year 2022, changes in depletions and shipments are now estimated to be between a decrease of 7% and a decrease of 4%. A change from our previous estimate of between a decrease of 8% and a decrease of 2%. We estimate the 53rd week will have a positive impact of between 1% and 1.5% on our full year depletions and shipments growth rates and between 4% and 6% points on our fourth quarter depletions and shipments growth rate.

We expect increases in revenue per barrel of between 4% and 5% a change from our previous estimate of between 3% and 5%. Full year 2022 gross margins are expected to be between 42% and 43.5%, a decrease more previous estimate of 43% and 45%, primarily due to the impact of higher inventory obsolescence as well as lower efficient Brewery efficiencies as we slowly ramp up our new integrated variety pack lines. We continue to expect to cover inflationary cost increases through pricing. Our full year 2022 investments in advertising promotional and selling expenses are expected to decrease between $35 million and $45 million it changed from our previous estimate of a decrease of between $30 million and $50 million. This does not include any increases in freight costs for the shipment of products to our distributors.

We estimate our full-year 2022 effective tax rate to be between 26% and 27%. We expect capital expenditures of between $105 million to $125 million a change from our previous estimate of between $110 million and $140 million. The capital will be spent, mostly on continued investments in our breweries to further build our capabilities and improve our efficiencies. We expect that our cash balance of $222.1 million as of September 24, 2022 along with our future operating cash flow and unused line of credit of $150 million will be sufficient to fund our base business and future growth initiatives.

Lastly, we are planning to give full year 2023 financial guidance on our fourth quarter earnings call in February 2023. This timing better aligns with our detailed internal budgeting process and will be based on more current information about the state of the consumer and the supply chain environment. We will now open up the call for questions.

Question & Answers

Questions and Answers:

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Operator

Thank you. We will now be conducting a question-and-answer session.(Operator Instructions). Our first question comes from the line of Nik Modi with RBC. Please proceed with your question.

Nik Modi - RBC Capital Markets - Analyst

Yeah. Thank you. Good evening, everyone.

David A. Burwick - Chief Executive Officer

Hey Nik

Nik Modi - RBC Capital Markets - Analyst

Hey, How are you. I have two questions, one is on Twisted Tea and I appreciate some of the details you gave about 12 pack expansion and advertising more during the year all across the year. But there's still a lot of questions obviously for investors in terms of sustainability of this brand especially given some of the situation that happened with Truly over the last couple of years. So maybe you could provide a little bit more details on why you guys are so comfortable that you can grow this brand going forward.

And more importantly what lessons can we learn from Truly to really apply to Twisted Tea to make sure that you could mitigate risk of category fatigue, especially as more competitors enter the fray. And I have one more question.

David A. Burwick - Chief Executive Officer

Okay, thanks, Nik, this is Dave. I'll take a shot at that. So I think - when we think about building any brand in particularly Twisted Tea there's really two key levers that we think about, one is about driving physical availability, which is really about making the brand easy to find. And the second is really about mental availability, which is making it easy to think about as a brand. I think what's happened over the last 12 months with the brand is that we kind of hit a tipping point on both of those, from a physical availability perspective, we talked a little bit about this, I think in the last call, but 12-pack distribution kind of get to that point is about 64% ACV right now.

So a lot of our larger customers could not then promote and support the brand much more aggressively than they had in the past. We also increased space by about 35% this year. So that increase the physical availability kind of helpful to the brand forward from a mental availability perspective, we've said essentially doubled our down on media last year, then we increases again this year on a campaign that we know works based on our testing. And we also were on air, almost 52 weeks of the year really driving for incremental reach. So the two of those together have really helped generate this sort of accelerated growth off of a growing base.

Now having said that, when you look deeper into where we are today, from a physical availability perspective, if you look at, convenience stores, as an example, which is the biggest channel for FMBs, the Twisted Tea original 24-ounce which I referenced in the script is about 69% of these that's for a worldwide distributed, but there are other single serve flavors like half and half Peach Raspberry have much less distribution is also very little 12-pack distribution within that channel.

So we still see a lot of upside. In fact if you look at our higher developed markets still have like maybe three or four single serve SKUs in the C-store and our low developed is like only one or two. So we see upside in that channel, also, if you look at large format where it's really about 12-pack game and again our Twisted Tea original 12-pack is in 64% of the ACV, if you look at look at our beer, three other 12-packs, the party pack, half and half and now white[Ph], which we just launched, kind of (inaudible) this year much less distribution.

So we still think there's a lot of upside there. And again high developed market will have probably three 12-packs, low developed market one or two. We see that also - we haven't talked about it but on premise is a fertile ground we're in draft. Our primary package is an original 12-ounce can. I think Twisted Tea is almost half of the share of FMB's on-premise and we barely got going there as we see something there.

So that's sort of - the last thing I'll say on the physical availability side is, as we get as we talk more about the brand our wholesalers particularly low develop markets are getting more and more excited about what they see happening in the rest of the country. From a mental availability perspective, the household penetration is about 4.7%. We use Mike's Hard Lemonade sort of as a proxy or comp, it's 7.5%, So still the comparison there's upside there and also brand awareness, were seven or 10 points less than Mike's. I think twisted Tea brand awareness is around low 80s. Mike Is low '90's. So the last thing I'll say on that. Then I'll get your second question is around multicultural consumers brand began sort of a rural maybe non-multicultural consumers in certain geographies it's just growing tremendously in that space. So the last five years we almost quadrupled in number of multicultural households who buy the brands, but there is still off a very low base. So there's still lot of opportunity.

So again, so we feel like the formula of physical and mental availability is working and I'd say - to jump into your second question, but what do we learn. I think building a brand slowly the right way, making sure you're really clear about the consumer and staying really focused on our message and combining both physical and mental availability has really worked with Twisted Tea and again the lot of brands have tried to come into the category and they haven't succeeded because thus far Twisted Tea has been able to do those things really well. I think Twisted Tea is a whole lot - and I'll let Jim and Frank jump up on this one, but the Hard Seltzer category was such unusual unprecedented moment,

It was basically a land grab, a goldrush, whatever you want to say and I think I would suggest that we –we innovated successfully but may be too much. And I think we were part of creating that consumer confusion that I referenced in my script. So I think it was just one of those things where that was the moment was there and we had a grab it. But I think which Twisted Tea fortunate to built the right way.

And so the last thing I'll say about it. I'm sorry, it's a long answer but it's important subject for us. We haven't overextended this brand like you don't need to over might extend this brand to get growth. We can get growth, a very healthy appropriate way and that's sort of where we are at the moment.

Nik Modi - RBC Capital Markets - Analyst

Very helpful and the second question is just on Truly, I mean, looking at numerator data it's pretty clear that the top four brands in the category top four-five are basically responsible for all the category penetration and all the rest are not really helping the overall category increased penetration, it's just more share shifting. So as one of the category leaders. I'm just curious like as you engage with retailers on this topic, I mean what's the feedback? How do you get this category moving in the right direction again in terms of household penetration?

David A. Burwick - Chief Executive Officer

Yeah that's good one, I think when we're talking, obviously we're talking retailers for the last few months about next year. I think retailers finally understand that. Now what's interesting is that the RTDs space has now more brands than the Hard Seltzer space. So they pivot in that direction and we would expect that next year that the bottom five or so brands will probably disappear in any given market and likely Hard Seltzer share of space right now is 11%, which is probably appropriate. It might shrink, but the brands that are left, the top three or four brands are so will have a larger piece of that space. I think, the quarter will be removed next year and it is the time when that's going to happen. And I think, our customers recognize that they are planning to do that, The question then becomes, does RTD cocktails become what Hard Seltzer became and a big mess. And we think it is really hard to shop, but we likely will see that. I think, the other thing I would say is that we were part of it. Reasons why people came to Hard Seltzer in the first place, like gets the most refreshing easy to drink, fun, variety filled category or segment that were replacement for beer or for traditional beer and other another alcoholic beverages and those characteristics of refreshing and easier to drink variety which have been somehow lost and diluted through all the noise and all the other things that have happened over the last year too. I think, getting back to that and we've tried to do that with our Ad campaign now that's out there and there'll be more evolutions of that, but we're trying to remind consumers why they came in the first place to hopefully help with the category and I think the last thing I'd say is that, proliferating SKUs is not the way to go (inaudible) add to more confusion.

So I think smarter innovation, what we're trying to do is focus back on the lighter flavors. We spent a lot of time focusing on our bold flavors and this year was Margarita, which as I mentioned has been very successful, but it hasn't been nearly enough to impact the total business because we probably taken our eye off the ball in light flavored Seltzer and that's worked a lot of consumers have been gravitating toward lightly and we have great flavors, that's what we reformulated them again and we need to remind people of what they are. So I think those are sort of the things that you would look to see as we enter 2023.

Nik Modi - RBC Capital Markets - Analyst

Helpful. Thank you.

Operator

Thank you. And the next question comes from the line of Kaumil Gajrawala from Credit Suisse. Please proceed with your question.

Kaumil Gajrawala - Credit Suisse - Analyst

Hi. Can you talk about gross margins a little bit and then maybe even if Frank you're able to give you a read on how much of the launching of the automated, the new variety pack line impacted this particular quarter and are you up and running now or we're no longer feeling the drag from that.

Frank H. Smalla - Chief Financial Officer

Yeah, no I'm happy to do that. So gross margin, clearly for the quarter came in below our own expectations and I think the main reason as I mentioned that in the prepared remarks was higher obsolescence that was mainly due to the changeover to the new Truly formulation, that was one of the largest projects that we have done. If you look at the complexity of the portfolio, the number of variety packs that we have in the different flavors that are in there, So there was a big project. And I think you have to see that in conjunction with like supply chain situation that we're in. We've opted as we've mentioned before to run slightly higher inventories for two reasons. One is, we want to make sure that we increase our service levels and we have enough inventory to service our wholesalers. The other one is, you look at the global supply chain situation and the disruptions that we're seeing wanted to make sure that we're not running out of packaging materials.

So this is nothing new. What happened is that the volumes for Truly and with an unfavorable mix came down and we were left with more stranded product than what we had originally expected. So this was impacting levels. The main reason why the gross margins were impacted and lower than our expectations. That's clearly not something that will happen all the time that's more one-time in nature. We've seen some progress in the rest of the drivers. I mean, if you remember when I lay out the drivers to get back to 50%, we're making progress.

The variety pack lines - we given a range, and we said, well, its going to take some time to improve the efficiencies. We have seen slight improvements, but there's still a lot of room left to get to the target efficiencies that we're seeing and that we are looking forward to get back to 50%. So I'd say the overall building blocks have not changed, the target hasn't changed, but this quarter was clearly impacted by the additional obsolescence.

Kaumil Gajrawala - Credit Suisse - Analyst

It sounds like it's complete, any additional obsolescence, it's all done you're operating under the new…?

Frank H. Smalla - Chief Financial Officer

Well we are now pretty much fully transitioned to the new formulation on all the products, so that should open it

Kaumil Gajrawala - Credit Suisse - Analyst

Okay, great. And then, can you maybe just add a little more detail on the Dogfish Head impairment, unlike seltzer which came in turned so fast, Dogfish has been around for a while, so just maybe just some color on what happened there?

Frank H. Smalla - Chief Financial Officer

Yeah, So this is relatively straightforward accounting assessment. If you recall, the transaction happened in the middle of 2019, which was literally half year before COVID and we had our own business proposition, which was the basis for defining the brand value that we put on to the balance sheet. So we had certain assumptions in there. Then you have to compare your revenue assumptions to what you're really achieving and that's the annual impairment test that everybody is doing typically.

The revenues below what we had defined in the business proposition and the main reason. So I would say is like COVID came in the middle of the integration, took a little longer. Clearly the craft beer market, if you look at the total beer category, the traditional beer side, the craft beer side has been suffering a little bit. So that contributed basically to the lower revenues versus what we had in the business position. From a business perspective I want to be clear, we like the asset, we think dogfish Head is a terrific brand and I think what has changed since 2019, is that we have now Dogfish Head can cocktails which were not really part of our consideration in 2019 and the can cocktails as you know, they are playing in the growing segment of the beer category in the beyond beer segment, they're getting tremendous traction, we have extremely high growth rate. So if I look at the profile of the Dogfish Head brand portfolio, I'm really happy with that. And I think it will provide a lot of growth and of a different quality quite frankly going forward than just having purely the craft beer, which we're kind of considering in 2019.

So I think the structure is a healthier structure, but given the size of canned cocktails it will take a little bit longer and that's why we took the impairment.

Kaumil Gajrawala - Credit Suisse - Analyst

Got it. Thank you.

David A. Burwick - Chief Executive Officer

Alright.

Operator

Thank you. And our next question comes from the line of Eric Serotta with Morgan Stanley. Please proceed with your question.

Eric Serotta - Morgan Stanley - Analyst

Great, thanks for taking the question. Wondering if you could give us some more color around Truly performance since the reformulation. I realize, it's still early, but it has been in the market for a couple of months now. Any green shoots, any more specific data that you could point to, because when we look at the overall data for the Truly likely flavored packs, it looks like it's going in the wrong direction, hasn't really improved. So any help there would be appreciated?

David A. Burwick - Chief Executive Officer

Okay. Eric. This is Dave. I think, so we started it was a number - a lot of like six variety packs that we switched over. The first was Citrus and Start that were started in early August, and we finished up probably at the end of September, so there's not a lot of impact.

In terms of our Q3 results. You're not going to really see anything there, but of course, I know you looking in IRI or (inaudible) where ever looking at there, which is up to the like second. And I think it's still, I would say it's still - we first of all, the, anecdotally, what we're seeing, social media, we're hearing from consumers and from all source it is positive about the change in the product. So we, people, we feel very good about for reformulation and the quality of product that we delivered. And it's going to take a while, I mean this is– this is a very - it's a very competitive market as you know. And it's not something that would show up like immediately overnight. In terms of green shoots. I mean, I can tell you, I'm look - we're look at numerator data for example. I've seen again this is, but I wouldn't draw any big conclusions, over the last four plus weeks we've seen buy rates increase and actually our buy rate, we had been going the other way on Truly this year we seen an increase.

We're not seeing that actually as you know you're suggesting. I can share numbers of the volume numbers, but that's a,– that's a good sign. There are other customers that we seen actually the brand is growing, I can't really name those customers they will improve to selling theirs tomorrow if I did, but we are seeing some green shoots, but again in a couple of large customers, but it's still early and I think we are in this moment like with this category literally people living week-to-week and trying to make big conclusions on that kind of pace and it's just not something that we expect to see, I think as the quarter plays out, then we'll look to see something that's more visible that I haven't to explain to you on an earnings call something you should see if it's working.

Again, the other thing I would say, we'd like the advertising support very highly. And we were pretty elaborate way to test a copy. But again, we're not, it's not like when we increase it. I think we sell it, we can't roughly say how much, but we definitely increased it, but it's still - it takes a while for that it doesn't have instant results and it takes a while for that to settle. And the last thing I'll say is the Truly Vodka Seltzer launch. What we like about that is putting - in this cash your way back onto Truly right, so on the brand itself and as I mentioned, we do have a very large base of consumers still.

We have a high - it's actually the highest penetration corner numerator in Hard Seltzer and 21 to 34 in beer and so we know they want to try our product, I think, so we'll get way to it and I think as we've, as we go into next year, you see the advertising continue and you also see other things that we do in the market to clearly signal that what's in the package has changed has improved. So again, I would say that this is really look at this, three to six months to really know for sure what the impact is going to be.

Eric Serotta - Morgan Stanley - Analyst

Okay. And then as you look at the broader Truly portfolio you kind of alluded to you guys being part of the part of the problem in terms of the category confusion or consumer confusion, are there plans to further rationalize the portfolio I picked up that you were discontinuing the Truly Ice Tea. But even with that, do you have too many variety of IV packs out there given where you see the shelf space going. And are there plans to rationalize that?

David A. Burwick - Chief Executive Officer

I think that's probably our decision. Probably our customers' decisions but yes your truity is going away. I think what you're going to see is more of a focus of communication focus on the core brands. The core lighter flavor brands and citrus tropical wild Berry, Margarita's performed really and Lemonade and Fruit Punch will stay and they're part of the reformulation as well. So we think, we're probably not going to be adding permanent SKUs next year it's unlikely. And I think what we're going to do is really double back down on the core lighter flavors and we'll see where that goes, but I think, we've been increasing at a pretty good pace. You're not going to see that kind of pace continue.

Eric Serotta - Morgan Stanley - Analyst

Okay, thanks. I'll pass it on.

David A. Burwick - Chief Executive Officer

Thanks.

Operator

Thank you. And our next question comes from the line of Kevin Grundy with Jefferies. Please proceed with your question.

Kevin Grundy - Jefferies - Analyst

Hey, great. Good evening guys. Two for me, if I could, just, look understanding that ”23 and beyond is a lot more important, the guidance for this year implies a really wide range, I guess, given where we are and the fact that they're much of the way through October. So Frank, maybe just comment on that, why such a wide range, where are you within the range now. I think would be helpful to folks.

And then a broader question for Jim and Dave. I'll just ask them both now, if that's okay. I guess given the impairment charges to Dogfish for the reasons that Frank talked about, and I don't think it's worth on folks in terms of what's happening within the craft beer industry. But, Jim, it would be great to kind of get your updated thoughts on the state of the union here in terms of the outlook for beer category volumes within starting the fourth category that's emerging here with ready-to-drink. And I think, start are being robust, kind of open the room here is love to get your thoughts on why should investors be confident that Malt base Seltzers don't go the way of mainstream beer and we're potentially looking at low-single digit declines. I know it's a lot worse than that, but at least at the moment, but as we level off here what gives you confidence that, that's going to return to grow? So a lot lies in that, appreciate your thoughts. Thank you all.

Frank H. Smalla - Chief Financial Officer

All right. Kevin. Let me start with the guidance. So I mean, first off, we have narrowed the guidance based on what we've seen. It's still relatively volatile, to be honest. So - and I think maybe for the shipment guidance that we have like we narrowed from minus two to minus eight to minus four to minus seven, we had narrowed the pricing range a little bit so broadly at the midpoint, we left net revenue largely unchanged. I think where, we have a bit of volatility and I would be seeing that I guess in the fourth quarter. If you look at –at last year, last year we had significant shipment declines in the fourth quarter shipments were declining versus the prior year versus 2020 by roughly 25% whereas depletions were going up 15% and that is versus a quarter in Q3 that was growing 11%. So there will be some volatility and we just wanted to make sure that we capture that in the guidance range.

And then clearly as you know, and we've mentioned that a number of times you have the 53rd week that will add little bit of growth. So, year-to-date, we are roughly, as you know, between 6% to 7%, what we have at the end of the quarter, 6% to 7% that has improved, trends have improved, which is a good sign. Hope that's going to continue. But then you add the 53rd week and then the innovation that we have is a little bit back-end loaded, primarily with Truly so that's coming mainly in the fourth quarter that's kind of where we are on the top line.

On the margin side, I think we have narrowed it down a little bit and as you know, there is volatility in the supply chain that internal supply chain and external supply chain, I talked about the obsolescence, which was higher than what we had expected. But we narrowed it down, we feel we have a good handle on it on the year to go. But it clearly depends also on the volumes and then as we said before, yeah, how much progress we also making on our efficiencies.

And then on the EPS, I think, that the midpoint hasn't really changed. We just haven't narrowed it down to three bucks. So we feel fairly confident that we're going to come in within the range. But its really the volatility on the topline that provides or that drives the width of the range, if you will.

Jim Koch - Founder and Chairman

Kevin, I'll try to pick up the second part of your question, which had a bunch of different moving parts to it, if you will. As I interpreted it, your first question was kind of what's the state of the union in craft and I would say craft is a mature category at this point, it has become a mainstay in American Beer with a substantial drinker base and it's hard to go into a bar today that doesn't have the least one and often multiple Craft beer. So it's relatively stable and mature category also quite competitive. There's still innovation driving it, as you can see from Boston Beer Company, with the addition of just a haze a non-alcoholic craft beer that just got picked as the best non-alcoholic beer in America, at the Great American Beer Festival.

So we do still see opportunities to innovate at an extremely high industry-leading quality level in craft, but overall the category is pretty stable and mature and that's what we see with Dogfish Head. We believe that is a strong in some ways unique brand and we believe that it brings some special attributes to the RTD category, which as I mentioned was growing 79% so far this year and Dogfish Head is now the number five or six RTD.

It's got a reputation for great quality and for innovation and for culinary ingredients and it has a unique positioning in some ways in this very crowded RTD space. It's a a craft producer, bringing craft values of innovation, great ingredients, great taste and overall quality too and kind of off-centered thinking and off-centered consumers to this crowded RTD space.

So we feel very good about the strength of the Dogfish Head brand, both in the mature craft category, but also as a unique vehicle for us to bring something special to RTD can cocktails.

You also asked about what's the future for malt-based Seltzers, is it going to just start to decline like traditional beer, I don't have a crystal ball on it, but I would say that won't be Seltzers as opposed to traditional beer, they obviously SKU much younger. They're not - they're very appealing to the 21 year old's to 35 year old's as opposed to traditional beer which is struggling a little more with that demographic and they were very relevant to new younger drinkers they're built on variety and innovation, they're built on unique flavors that are easy to consume. They're not an acquired taste and they also carry with them a little bit of a health halo given the lack of bad stuff mainly sugar and carbohydrates in them. So they are more in tune with the characteristics that younger drinkers want and bring something new to drinkers all across the age range.

So I think there is the opportunity with malt based Seltzers to continue growth there whether that's mid single digits, low single-digits, double digits, I don't know, but they do have attributes that significant part of the drinker base finds really attractive.

Kevin Grundy - Jefferies - Analyst

Okay, very good. Thanks for all the time guys. I appreciate it. Good luck.

Frank H. Smalla - Chief Financial Officer

Thank you.

Operator

Thank you. Operator Instructions). Our next question comes from the line of Bonnie Herzog with Goldman Sachs. Please proceed with your question.

Bonnie Herzog - Goldman Sachs - Analyst

All right, thank you. Hi, everyone. I wanted to circle back on guidance with a follow-up, I guess, just thinking about your updated guidance ranges you narrowed the ranges, but you took the midpoint of your depletions and shipment guidance down by 50 bps and the midpoint of your gross margin guidance down by 120 bps but I guess you left the mid point of your GAAP EPS guidance the same. So I guess I'm just trying to reconcile this. I mean, should we assume your full-year EPS realistically, I guess, comes in towards the low-end of your new range, or you just maybe being conservative on some of the other ranges?

Frank H. Smalla - Chief Financial Officer

No, I think it's more the latter, Bonnie. I don't - I wouldn't do - we're not putting (inaudible), we believe we are going to come in at the low-end. I mean we are adjusting the ranges accordingly. I wouldn't read too much into the shipments the 0.5% point we narrowed it on pricing. So the way we're looking at it is really revenue is going to stay about the same. I mean its the volatility that we're seeing in the market and I referred to also especially growth rates versus prior year. Especially when you look at shipments. I don't think we are the precision of half a point quite frankly. So that's it, on the gross. On the gross margin, yeah, we had a few surprises. So I think it would be the latter. So, but I wouldn't expect that, I wouldn't interpret that we would target the lower end of the EPS range. That's not the case.

Operator

Thank you. And our next question comes from the line of Steve Powers with Deutsche Bank. Please proceed with your question.

Steve Powers - Deutsche Bank - Analyst

Great, thanks. I actually wanted to go back to Twisted if I could and two questions, the first one I think is pretty short, it's just, I don't know if you've got any updated process to how much, if at all twisted in the current environment is itself benefiting from consumers moving away from Seltzer and experimenting and finding Twisted?

David A. Burwick - Chief Executive Officer

Yeah, I think on that, I think if you went back a year ago and looked at this and we're Hard Seltzer sourcing volume, it really didn't impact Twisted Tea very much at all. I mean, it does to an extent every brand - everybody drinks everything but it didn't over index by any means with hard seltzers. I don't think it's getting like a, tailwind now as the Hard Seltzer goes down, but I'm sure there's some consumers that are switching, but it's not, I would say it's not material to Twisted is current growth.

Steve Powers - Deutsche Bank - Analyst

Okay. (multiple speakers)

David A. Burwick - Chief Executive Officer

And actually, if you look at it accelerate - actually if you look at it, you really, if it goes back to literally like this, things started to really kind of tip, I would say last summer, like last - maybe last year, maybe the first quarter of last year. So when this thing started to accelerate from sort low 10%, 12% to plus 20%. It was really when Hard Seltzer we're still going strong.

Steve Powers - Deutsche Bank - Analyst

Yeah, -Okay. And that kind of leads to my second question. And then maybe part of the answer is in what you just said, but I just - kind of going back to started on the topic, you talked a lot about growing the brand double digits for 20 years very patient, deliberate, robust but relatively deliberate growth.

And so it feels like the brand has been sort of pulling demand, kind of, ahead of availability. And now I just, I guess, I'm a little concerned and I think this is the route of kind of what Nick was asking about to that all of a sudden, as the branded accelerated, that there is a really big distribution push and a big advertising push kind of almost getting ahead of the natural pull and maybe as consumers are out there, exploring for the next kind of novel thing, that they're kind of finding so it is part of that search and then experimentation as part of what's driving the growth right now. But then as we fast forward a year, 18 months from now. After a big distribution push just like you were talking about with Seltzer that the novelty kind of worn-off that we look back and say the novelty on Twisted Tea is worn off. So I guess just any additional thoughts you might have on what I'm saying and how you're comfortable that's not happening?

David A. Burwick - Chief Executive Officer

Yeah And that would say I go back to Seltzer where it was before, which is there is like you know, the depth of distribution is still has a lot of runway. So it's not like when, we are not even close to the end in term but you look at it by channel it would be small format convenience to a large format single serve SKUs, multipack SKUs. There is still significant runway to get to drive distribution then from a metal availability perspective are - I mean, we've increased our media, we've increased our awareness, household penetration, but it's still very, very low. I mean it's still low.

So it's not, we don't think that we're coming close to sort of peaking. I mean, we're are we going to grow 30% every year, probably not, it's very unlikely. But we still see a lot of growth here and I think some of the other things to look at, I mean when I look at, when I look at this brand is, I just look at convenience store. And I always can stop right there, because that is like that is - think of that that's your freedom of choice channel that's where the consumer walks, they're do not tripping over displays, they're not seeing big price promotions, they're going in and they're making a choice.

And this brand is by far and away the number one player in F&B and in fact, like I said before, it's one of the top three or four brands in all of beer and convenience stores and it's always been that way. But again, then you have the geographic disparity where you go, we walk into Montana or Maine or Vermont and you'll see a full shelf of Twisted Tea walk into New York City or LA or or Houston, you'll see maybe one or two cans. So this is a brand that clearly has a following, it's been quite narrow and now it's starting to grow, but it's growth - we're not –. I don't think we're foreseeing it on people, we're pushing it too hard.

We do a lot of work on social media. We're not trying to feel like a big brand and people are finding it. So I guess, obviously, time will tell what we feel like, again when you get balance the physical availability, the mental availability and you have still upside in both of those, then that's a good - that's a very rare place to be and I would argue there's probably two or three brands in this entire category that are sitting in that position.

Steve Powers - Deutsche Bank - Analyst

Yeah. Okay, that's fair and very helpful. I appreciate it. Thank you very much.

David A. Burwick - Chief Executive Officer

Sure thanks.

Operator

Thank you. And our next question comes from the line of Rob Ottenstein with Evercore. Please proceed with your question.

Rob Ottenstein - Evercore - Analyst

Great, thank you very much. So Jim, I'd love to get your thoughts kind of standing back now on what you're learning about consumer behavior in beverage alcohol and then how that informs your strategy and tactics particularly on Truly and so at least what we're seeing with Spirits promos today, it's kind of like growing mid-single digit led by premiumization. So the spirit seem to be doing really well. Mainstream beer is falling a couple of points or so, which is what it has been doing. And then in the middle there's Seltzers and obviously we're in an adjustment period there.

But my question kind of is are Seltzers priced right, particularly kind of going into a recession where Seltzers are I guess $30 or so a case Bud Light's $20 a case, you did mention that some of the - you are seeing some people trade down, particularly, older demographics, but given that Seltzer SKU younger going into a recession.

Do you think the pricing is right for Seltzers in general relative to spirits and mainstream beer? And is the pricing right for Truly? And do you need more promos or some sort of clever marketing to provide more perceived value? That would be my first question.

Jim Koch - Founder and Chairman

My opinion on it. We are not really seeing a lot of trade down in alcoholic beverages as a whole, a little bit of bump for some sub premiums, but the growing categories like Twisted Tea or Mexican imports, they are premium priced at about that kind of premium not quite 50%.

But that order of magnitude and that's where the growth is in beer and in our alcoholics. Beverages in general is more towards the premium, and then the cheap products and we've seen this in recessions in the past a craft beer or a Truly, or Twisted Tea things that are different unique they have sailed right through recessions. So I'm guessing that - and it's partly because you're talking about a very affordable indulgence you might not be go out for a stake dinner, but you can come home with 12 pack of a premium product and feel good about yourself. So that would be my experience from the past and I think consumer - in general my view of the world is that traditional beer is probably not going to grow, maybe not in our lifetime. Though I can't see that far out because intend to live for a while, I believe same thing is probably true about traditional wine, as their demographics age out and in hard liquor I think the growth is going to be in this fourth category that is not traditional beer, not traditional wine, not traditional spirits.

And my belief is that the beer industry is pretty well positioned there, because it generally looks like beer, it's in the cold box, it's kind of ABV's of beer it's in beer type packaging and it's heavy and you need high-speed can lines to make it and distributors that can move tonnage. So I see Boston Beer is well positioned in the growing segment of alcoholic beverages. So we are the number two in this Beyond Beer category.

It's a vast majority of our business and we're organized around making that kind of products both in the capital that we put in, with high speed can lines and automated variety packing and other capabilities like sensory and flavor, people and a wholesaler network that can get this stuff on the shelves very well in advantageous positions.

Rob Ottenstein - Evercore - Analyst

Right. No that's terrific. And it's certainly fair enough. Great. And then just one follow-up on. Frank, maybe could you kind of update us on your latest thoughts in terms of capital allocation. The cash is building nicely on the balance - I mean you've got a fabulous balance sheet which is great. Is it time to look at dividend, share buybacks, are there strategic acquisitions that may make sense, just trying to get just updated thoughts on those sorts of questions? Thank you.

Frank H. Smalla - Chief Financial Officer

Yeah, Sure. So, as you know, I think really, it changed our approach to like how we think about capital allocation. Clearly, the business comes for us we're a growth company. We have our ups and downs, but the long-term growth company that's where the investments go in terms of capital and other investments.

And then we had like the last few years, were highly volatile and bumpy for globally for the world and in which we're operating. So typically whatever is left over that is not needed for the business. We return to shareholders and we have a preference for share repurchases, at least in the past, and I don't see that changing in the near term over dividends when the time is wide and to your point, you look at the balance sheet that looks nicely. I think we feel more comfortable than a year ago, but when the time is right, we'll announce that.

Rob Ottenstein - Evercore - Analyst

Terrific, thank you very much.

Frank H. Smalla - Chief Financial Officer

All right.

Operator

Thank you. And the next question comes from the line of Nadine Sarwat with Bernstein. Please proceed with your question.

Nadine Sarwat - Bernstein - Analyst

Thank you. All right. So two questions from me. First providing guidance over the last 12 months. I mean has been challenging for Boston Beer, given what's been happening with the Hard Seltzer category, the uncertainty, so what's behind your decision to commit to providing fiscal 2023 guidance, your next results?

And then secondly, coming back to Twisted Tea, there are many new entrants coming into the hard tea space, most notably Lipton with its alcoholic brand, how do you anticipate Twisted Tea performing in this increasingly competitive environment.

David A. Burwick - Chief Executive Officer

Yeah, Nadine, so clearly on the 2023 guidance, I mean, we've talked about it, there is quite a bit of volatility and I think we want to provide guidance when we feel more comfortable with the data, and I think it's typically it's industry practice. You announced with the Q4 results, which is the majority is doing, and that makes sense in an environment like this.

So we are - the way we are planning, we have significantly better handle on where the categories are going where the consumer is going, how we see the progress of our supply chain. So that's the reason why we said okay, if there is no point in giving preliminary guidance now with the Q3 earnings call, we'd rather do that once with the Q4 earnings call. That's the reason why we decided to do that and I think it's easier for you guys as well. It's going to be better guidance than what we would be able to provide at this point. And now. I'll pick up the Twisted Tea question and it's a good question. There's is a title wave of competitors coming into Tea because it's a large sizable category that's growing extremely fast and we live in a very competitive environment. I would say, historically, this isn't the first time we've had a bunch of competitors coming added, Twisted Tea has been around over 20 years and there literally been dozens of Twisted Tea competitors launched from small start entrepreneurs to great breweries like Anheuser-Busch or Molson Coors and the dust is settled over 20 years and Twisted Tea is 90% plus of the category.

There really is no significant number two in the category. Now that being said, I don't want to dismiss both the quantity and the quality of the next wave of competition coming from again everybody from small entrepreneurs to big multi-hundred billion dollar market cap company with a great track record of beverages like Pepsi, so this is another level of competition, but we stood it in the past because we have a very loyal, very strong drinker base, people been drinking Twisted Tea for a decade or two.

It's the only brand that really comes to mind. When you think about hard tea. It kind of owns that category as Dave was talking about both in physical distribution or you walk into a store and there's a block of yellow and blue, and then there's other unknown things that are next to it, that say tea on it, but they don't have the credibility or the longevity or reputation and has the mental availability for thinking about hard tea, you think about Twisted Tea.

It's really not much else that comes to mind. So it's a very competitive business and whenever you're successful you're going to get a whole bunch of competitors and we're going to amp up our investment. We have tremendous support from our wholesalers, because this is now become a meaningful part of their business and they're going to expand our shelf space but that's all we can do, we can keep people out and we can't keep them from trying to be successful, but certainly it is a category where we dominated and have for 20 years. And does this kind of settled. I guess the nearest analogy would be Mike's Hard Lemonade and they've had a couple dozen competitors and there 90% of the Hard Lemonade market and have been for over 20 years. So it's not - would not be an exception to what goes on in this business for Twisted Tea to maintain its 90% share.

Nadine Sarwat - Bernstein - Analyst

Got it. That's very helpful and maybe just a clarifying point. I didn't mean, why wouldn't to provide fiscal 2023 guidance today. I simply meant that some companies might elect to postpone providing guidance at the next results, simply because of the lack of - simply because of the uncertainty around Hard junctures or the macro environment, but you guys have committed to providing guidance, so I guess that's what I was asking.

Jim Koch - Founder and Chairman

Okay. Yeah. No, at this point, we haven't made any decision to not provide guidance we just provided in our Q4 results. Yes.

Nadine Sarwat - Bernstein - Analyst

Understood. All right, thank you very much. I'll pass it over.

David A. Burwick - Chief Executive Officer

Thanks.

Operator

Thank you. And as a final reminder, (Operator Instructions) And our next question comes from the line of Peter Grom with UBS. Please proceed with your question.

Peter Grom - UBS - Analyst

Hey, good evening, everyone. Hope you're doing well. So maybe going back to that last point on guidance, recognizing that you're choosing not to provide it today. I was just hoping to get your view on whether you have visibility on kind of the gross margin trajectory. And I guess specifically, how should we really think about the pace and magnitude of margin recovery.

As we look out into 2023 kind of lapping some one-time issues that hopefully shouldn't repeat here and I guess, kind of the view of the question is, I'm really just trying to understand, based on what you know today? How quickly can you return to that long-term gross margin goal of kind of north of 50%? Thanks.

Frank H. Smalla - Chief Financial Officer

Yeah, no, fair question I will probably – I tried to answer as best as I can, without giving guidance the back door, but clearly, I guess. I think I've indicated before, we feel good about the building blocks to our gross margin. So we had this quarter, nothing has really changed that. We know exactly what it takes to get back to 50%, we have - I think indicated, also at the last earnings call, it will take some time and we want to see kind of more proof to see it come through. We have seen, we've started on that journey for next year, we expect on those different streams, we expect progress, clearly. The one time-off that we've talked about the obsolescence charges, a lot of things that happened in the first half of the year in the aftermath of what happened in 2021. We will take this all into consideration when providing guidance and I think what I can tell you fundamentally when it comes to the gross margin nothing has changed versus what we - what we already said in the July earnings call.

Peter Grom - UBS - Analyst

Thanks so much. I appreciate it best of luck.

Frank H. Smalla - Chief Financial Officer

Thank you.

Operator

At this time there are no further questions. And I would like to turn the floor back over to Jim for any closing remarks.

Jim Koch - Founder and Chairman

Thank you everybody and we look forward to speaking again in February.

Operator

Thank you, everyone. This does conclude today's conference call. You may disconnect your lines at this time. Thank you for your participation and have a great day.

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Q3 2022

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