Belgium’s AB InBev saw a 5% increase in its shares on Wednesday following the release of its first quarter financial results. Despite a 0.6% decrease in volumes sold, the world’s largest brewer managed to achieve a 2.6% increase in revenue to $14.55 billion, slightly surpassing analyst expectations. Additionally, the company reported higher underlying profit of $1.5 billion, exceeding a consensus compiled by LSEG.
The first quarter results indicated that AB InBev had managed to navigate through a year-long boycott of its Bud Light brand without significant damage. This boycott, initiated by a social media campaign in response to a sponsorship deal with a transgender influencer, resulted in a drop in sales but did not severely impact the company’s overall performance. Former U.S. President Donald Trump even encouraged his followers to give AB InBev a “second chance” amidst the controversy.
Although AB InBev experienced a decline in sales of its own beer brands in North America, particularly Bud Light, the company saw growth in other regions. Sales in China dipped due to industry-wide factors such as the country’s reopening and unfavorable weather conditions. However, sales were strong in Brazil, Colombia, Europe, Mexico, and South Africa. The company’s Corona brand, especially its non-alcoholic beer variant Corona Cero, showed promising growth.
AB InBev reiterated its medium-term earnings outlook, expecting an EBITDA growth of 4% to 8%. CEO Michel Doukeris expressed confidence in the company’s performance, highlighting the strength of its beer category, global presence, and popular brands. Analysts at Barclays described the first quarter results as a “solid print at the start of the year,” indicating a positive sentiment towards AB InBev’s future prospects.
Overall, AB InBev’s performance in the first quarter demonstrated resilience in the face of challenges such as the Bud Light boycott and regional sales fluctuations. The company’s ability to navigate through these obstacles while achieving revenue and profit growth reflects its strong market position and strategic planning. As AB InBev continues to focus on its core business and global expansion opportunities, investors can look forward to sustained growth and value creation in the future.
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