Belgium’s AB InBev saw a 5% rise in its shares on Wednesday morning following the release of its first-quarter results. The company reported higher revenue and profit, with a 2.6% increase in revenue year-on-year to $14.55 billion. Analysts noted that this growth narrowly exceeded expectations, despite a 0.6% decrease in the volume of beer sold. The underlying profit attributable to shareholders also saw an increase to $1.5 billion, surpassing consensus estimates.
The company managed to weather a year-long boycott of its Bud Light brand relatively unscathed, with the first quarter being the last period expected to be negatively impacted by the campaign. The boycott, initiated through a social media-led backlash against AB InBev’s sponsorship partnership with transgender influencer Dylan Mulvaney, dethroned Bud Light as the best-selling U.S. beer. However, former U.S. President Donald Trump’s call for giving the company a “second chance” in February helped mitigate some of the damage.
Despite the challenges faced in North America, where sales of AB InBev’s own beer brands saw an 11.1% decline, the company saw growth in other regions. Revenue rose by 7.8% last year, driven by strong sales in Asia-Pacific and Central America. Sales in China dipped by 2.7% due to industry-wide factors, but record highs were reached in Brazil and Colombia. Additionally, the company experienced growth in Europe, Mexico, and South Africa.
AB InBev reiterated its medium-term outlook for earnings before interest, taxes, depreciation, and amortization (EBITDA) of 4% to 8%. CEO Michel Doukeris highlighted the strength of the beer category, the company’s global footprint, and the momentum of its megabrands as drivers of growth. The firm’s Europe CEO, Jason Warner, emphasized a commitment to “staying in our lane” following the Bud Light controversy, indicating a focus on reaching a wider range of consumers while avoiding potential backlash.
AB InBev’s ability to navigate the challenges posed by the Bud Light boycott and deliver positive financial results in the first quarter underscores the resilience of the company. By staying focused on its core strengths and strategic priorities, AB InBev remains well-positioned to continue driving growth and profitability in the face of evolving market dynamics.
Leave a Reply