Anheuser-Busch InBev Budweiser and Bud Light brand beer cans inside a store in Queens, New York, on February 28, 2024.
Bloomberg | Getty Images
Belgian stocks Anheuser-Busch InBev On Wednesday morning, the company reported a rise in first-quarter revenue and profits, and analysts said the company emerged relatively unscathed from a yearlong boycott of its Bud Light brand. Shares rose 5%.
The world’s largest beer maker, whose brands include Corona and Stella Artois, saw first-quarter revenue rise 2.6% year-on-year to $14.55 billion, slightly above analysts’ expectations. This was despite the brewer’s sales falling 0.6%.
Underlying profit attributable to shareholders was as high as $1.5 billion, also higher than the consensus compiled by LSEG.
In April 2023, a social media campaign was launched against Bud Light in response to a sponsorship partnership with transgender influencer Dylan Mulvaney, which made the final quarter likely to be affected year-on-year. negative impact.
Former U.S. President Trump urged his followers on social media in February to give the company a “second chance.”
The uproar upended the brand’s status as the best-selling beer in the United States, but also sparked criticism of the company’s failure to support Mulvaney. This has sparked wider discussion in the advertising industry about concerns about companies facing backlash for promoting diversity or inclusion.
Jason Warner, CEO of AB InBev Europe Tell The Telegraph said earlier this week that the drinks company would “remain in our lane” following reaction to the campaign, which is designed to appeal to a wider range of consumers.
Still, the company’s revenue grew 7.8% last year, driven by sales growth in Asia Pacific and Central America.
First-quarter results showed that sales of Anheuser-Busch InBev’s own beer brands in North America fell 11.1%, which was said to be mainly due to Bud Light. Meanwhile, revenue in China fell 2.7% and sales fell 6.2%. The company said the decline was consistent with a broader industry downturn linked to China’s reopening last year and severe weather in March.
However, sales in Brazil and Colombia hit record highs, and sales in Europe, Mexico and South Africa also grew steadily. The results also mark the growth of its Corona brands, particularly its non-alcoholic beer brand Corona Cero.
“Almost no bruises”
AB InBev reiterated its medium-term outlook for earnings before interest, taxes, depreciation and amortization (EBITDA) of 4% to 8%.
“The strength of the beer category, our diverse global footprint and the continued momentum of our great brands delivered another quarter of broad-based revenue,” Chief Executive Michel Doukeris said in a statement. and profit growth.
Analysts at Barclays said in a note that the result was “a solid result at the start of the year.”
“Bud Light continues to hurt results, but this is the last quarter to face a significant impact — it’s all easy (comparison) from here on out,” they said, adding that the company had “taken very little action “Going through the toughest quarter. No bruises. “
“We remain optimistic about full-year revenue and cost improvements, leading to a materially improved balance sheet at the end of the year and potentially increased buybacks.”
Meanwhile, analysts at Royal Bank of Canada Europe raised the target price on the stock to 75 euros from 73 euros. Earnings were “pleasantly flat” but could restore AB InBev’s status as a “stable compounder”, they said.
“We’ve passed the anniversary of the Bud Light crash, and while we don’t expect a sharp rebound, we think the absence of a drag — equivalent to about 10% of U.S. volumes — will further bolster investor sentiment. ,” analyst James Edwards Jones said in a note.
About The Author
