Anheuser-Busch InBev NV, the world’s largest brewer, reported profit growth that beat analysts’ estimates on the strongest pricing in at least a decade.
(Bloomberg) — Anheuser-Busch InBev NV, the world’s largest brewer, reported profit growth that beat analysts’ estimates on the strongest pricing in at least a decade.
First-quarter adjusted earnings climbed 14% to $4.8 billion, said the brewer, whose Bud Light brand got caught up in a marketing controversy last month. Volumes returned to growth after a dip in the fourth quarter of 2022.
Brewers ranging from Heineken to Carlsberg have been raising prices to offset higher costs for aluminum, energy and grains. AB InBev boosted pricing by 12% in the quarter and its premium beers outperformed.
In April, Bud Light suffered a backlash in the US over an advertising campaign with transgender social-media influencer Dylan Mulvaney, which may weigh on second-quarter sales.
AB InBev didn’t comment on the matter in its statement Thursday. Bud Light makes up a third of the brewer’s volumes in the US, according to Jefferies. The brand’s volumes dropped 11% in the first week of April and 21% in the second, analyst Edward Mundy said before the results.
The stock was little changed in Brussels Thursday morning.
The brewer maintained its forecast that Ebitda should rise 4% to 8% on an adjusted basis this year. Analysts are expecting 7.5% growth.
While revenue in the US grew by 4% on higher prices for more premium beers, sales to retailers fell by 3%, which is below industry levels. Ebitda in that market was flat.
What Bloomberg Intelligence Says:
“AB InBev delivered its expected volume rebound in 1Q, despite impressive pricing of 12.3%, but life may be more difficult in subsequent quarters as emerging market consumers are beginning to feel the effects of inflation. The company may need to shift its marketing plans to its mainstream offerings to keep its 4-8% operating-profit guidance.”
— Duncan Fox, BI consumer-goods analyst
Last month, Heineken stuck to its outlook for adjusted operating profit to grow by a mid- to high-single digit percentage this year even as Chief Executive Officer Dolf van den Brink warned of cloudy consumer demand for its products. Carlsberg A/S raised the lower end of its earnings forecast, expecting growth in a range of -2% to 5%.
AB InBev’s first-quarter organic sales growth of 13% was largely ahead of analysts estimates, partly due to hyperinflation in Argentina. Excluding revenue from that country, revenue was up 9.1%.
–With assistance from Joel Leon.
(Updates with sales in final paragraph)
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