HINKF - Budweiser-parent AB InBev gains as pricing actions help offset fall in Q3 beer volumes

2023-10-31 12:59:31 ET

U.S.-listed shares of Anheuser-Busch InBev ( BUD ) on Tuesday rose as much as 5.3% , after the beer giant offset a decline in Q3 volume through price hikes, helping overall revenue rise.

BUD stock was last up 5% to $56.75 in afternoon trade.

The world's largest brewer reported Q3 adjusted earnings per share of $0.86, beating estimates by 5 cents. Revenue increased 5% Y/Y to $15.57B, but came in short of consensus by $150M.

Total volumes slipped 3.4% in Q3, largely due to a more than 17% plunge in North America.

AB InBev ( BUD ) management in a statement said that the company saw "revenue growth in approximately 80% of our markets, driven by a revenue per hl increase of 9.0% as a result of pricing actions, ongoing premiumization and other revenue management initiatives."

"Volumes declined by 3.4%, as growth in our Middle Americas, Africa and APAC regions was primarily offset by performance in the US and a soft industry in Europe," management added.

The weak performance in the U.S. was primarily due to slumping volumes of Bud Light beer. The brand, once the top beer among American consumers, has been significantly hurt since the summer due to backlash over a controversial ad campaign featuring transgender influencer Dylan Mulvaney.

However, investors appeared to react favorably to BUD's ability to see revenue growth and an increase in profitability despite its troubles over Bud Light.

Moreover, AB InBev ( BUD ) also announced a new $1B share buyback program and said it had approved a cash tender offer for up to $3B in bonds, as the brewer looks to cut into its debt pile.

Turning to BUD's guidance, the company reaffirmed its EBITDA growth forecast of in line with its medium-term outlook of between 4-8%, and revenue forecast of growth ahead of EBITDA.

AB InBev's ( BUD ) results mirrored that of rival and world's second-largest brewer Heineken ( OTCQX:HEINY ) ( OTCQX:HINKF ) from last week , which also saw revenue growth despite a fall in beer volumes.

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