Bud Brewer AB Inbev's Volumes Dragged by Weaker China Demand, Boycott Fallout — Update

By Michael Susin

Budweiser brewer Anheuser-Busch InBev said volumes in the second quarter fell, dragged by weaker demand in China and the continuing fallout from a boycott of its Bud Light brand in the U.S.

The world's largest brewer said Thursday that volumes for the quarter decreased 0.8% on an organic basis from the same period last year, a steeper fall than analysts' expectations of a 0.6% decline, based on consensus estimates provided by the company.

Volumes in China declined 10% due to weaker demand and adverse weather during the period, the maker of Stella Artois, Michelob Ultra and Busch Light said.

AB InBev said the industry had a weak start to the year in China, the latest sign of how economic uncertainty in the world's second-largest economy is hurting Western companies, ranging from luxury goods companies to automakers. On Monday, Dutch brewer Heineken reported weaker-than-expected earnings for the second quarter and wrote down the value of a big investment in China.

Beyond China, AB InBev reported lower volumes in North America and Argentina as the company posted its fifth consecutive quarter of overall organic volume decline.

The brewer's share of the U.S. beer market was flattish in the second quarter. It has lost out to competitors following a Bud Light boycott that began in April 2023 after transgender influencer Dylan Mulvaney posted an Instagram video about a personalized beer can the brand had sent her as a gift.

Bud Light has since lost its place as the U.S.'s top-selling beer and now trails Modelo Especial and Michelob Ultra, even after a surprise endorsement from former president Donald Trump, according to recent industry data.

AB Inbev's underlying net profit--which strips out exceptional and other one-off items--rose to $1.81 billion from $1.45 billion.

Revenue rose to $15.33 billion from $15.12 billion, beating market expectations of $15.47 billion, according to Visible Alpha. Organic growth of 2.7% missed consensus expectations of a 3.5% rise.

AB InBev said it continues to expect 2024 earnings before interest, taxes, depreciation and amortization to grow in line with its medium-term outlook of between 4% and 8%.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

August 01, 2024 03:20 ET (07:20 GMT)

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