AB InBev Demonstrates “Resilience” In 2Q Results Despite Bud Light Boycott

Anheuser-Busch InBev shares are up as much as 3% in New York during premarket trading Thursday after profit growth beat analysts’ expectations despite a slide in the US market following the Bud Light marketing fiasco with transgender social media influencer Dylan Mulvaney. 

The world’s largest brewer reported earnings for the second quarter that gained more than 20% in Brazil, China, and Colombia, which offset a massive 28% plunge in the US market. AB InBev maintained its profit guidance for the year. 

The weakness in the US market was “primarily due to the volume decline of Bud Light,” the brewer pointed out. Bud Light’s partnership in early April with Mulvaney sparked a nationwide boycott of the beer. 

AB InBev, which also manufactures Budweiser, Corona, and Stella Artois, reported revenues increasing 7.2%, beating a company-provided market consensus of 6.4%. 
“Given Bud Light’s travails this is an impressive demonstration of AB InBev’s resilience and diversification . . . we believe that the share price has overreacted to the Bud Light situation,” RBC Capital Markets analysts wrote in a note to clients. 

“We consider this to be a better result than had been feared,” wrote Investec analyst Alicia Forry. She added, “The unchanged full-year outlook is also positive.” 

Rivals have been benefiting from Bud Light’s demise. In June, Constellation Brands Inc. reported revenue that exceeded analysts’ expectations after its Modelo brand was crowned the bestselling US beer. On Tuesday, Miller Lite maker Molson Coors Beverage Co. recorded record sales. Bloomberg Intelligence analyst Duncan Fox noted that one-third of AB InBev’s profit last year was from North America. 

Moving forward, AB InBev maintains its forecast for 2023, forecasting Ebitda growth to be in line with its medium-term outlook of between 4% and 8%. The brewer also expects revenue to outpace Ebitda from a combination of volume and price. 

Royal Bank of Canada Analysts said they were “pleasantly surprised” today despite no recovery in sight for Bud Light. 

AB InBev shares were up 3% in the premarket hours. 

The earnings report highlights the importance of AB InBev’s diverse portfolio to remain resilient amid the demise of Bud Light.