Anheuser-Busch InBev reports mixed profits as it tries to shake off Bud Light boycott

Anheuser-Busch InBev (BUD) is trying to get back into the game after a challenging 2023.

The beer giant reported revenue of $15.33 billion, below the expected $15.49 billion. The margin recovery drove 10.2% growth in EBITDA, higher than the 9.24% growth expected by Wall Street, based on Bloomberg Consensus data.

Adjusted earnings per share of $0.90 also beat estimates of $0.86.

Volume growth is still lagging, falling 0.8% year over year, dragged down by sales in the US and China.

“Our global momentum continued this quarter. The strength of our diversified footprint and consumer demand for our mega-brands delivered another quarter of broad-based top- and bottom-line growth.” AB InBev CEO Michel Doukeris said in the statement.

Shares of rival Heineken (HEIA.AS) are down 8% this week following its report on Monday that an expected boost from summer sporting events failed to materialize. Meanwhile, Diageo (DEO) warned of a slowdown in US consumption.

Anheuser-Busch InBev reiterated its 2024 guidance of EBITDA growth of between 4% to 8%, taking into account inflation and other macroeconomic conditions.

“No change, as expected, to 2024 guidance…which we believe is conservative. We believe results will be viewed positively and expect consensus to rise slightly (mainly driven by US EBITDA),” said Andrea Pistacchi, analyst from Bank of America. in a note to customers.

Pistacchi said the team is “increasingly confident that Anheuser-Busch InBev will have a strong year.”

In the US, revenue fell 0.6% as the dust settled after the Bud Light boycott last April.

Sales to wholesalers fell 2.7% and sales to retailers fell 4.1% in the US. The company said it is “aligned with the industry as we had a challenging comparable cycle in April but gained industry volume share in May and June,” according to the statement.

In the four-week period ending July 6, 2024, Bud Light sales fell 18.6% from a year earlier, while Miller Lite fell 0.1%, Coors Banquet rose 16.3% and Coors Light grew 2.3%, according to data from Bump Williams Consulting and NielsenIQ.

Its other brands, Michelob Ultra and Busch Light, helped offset Bud Light’s losses. Overall, its share of the beer market is now “stagnant” according to the statement. Its ready-to-drink canned cocktails segment saw volume growth in the mid-teens in the US.

Last June, Constellation Brands’ (STZ) Modelo Especial overtook Bud Light as the No. 1 beer in the U.S. and still holds that position, while Anheuser’s Michelob Ultra is now No. 2.

The story continues

Bump Williams of Bump Williams Consulting said the reason for the rise of Modelo and Michelob Ultra is not only the gains from the Bud Light boycott, but also Michelob Ultra following the trend toward lower calorie options and Modelo Especial being sold at a premium price.

Modelo is also gaining more shelf space as the popularity of Mexican imports grows.

Anheuser-Busch’s China business reduced overall revenue and volume growth by 15.2% and 10.4%, respectively, due to weather and a “weak industry” overall as the macro environment prevails .

Here’s what Anheuser-Busch InBev reported, compared to Wall Street estimates, based on Bloomberg consensus data

• Revenue: US$ 15.33 billion against US$ 15.49 billion

• Adjusted earnings per share: $0.90 vs. $0.86

• Volume Growth: -0.80% versus -0.49%

• Price growth: 3.50% versus 3.62%

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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Brooke DiPalma or send an email to bdipalma@yahoofinance.com.

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