AB InBev earnings beat analysts’ estimates despite Bud Light boycott

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Anheuser-Busch InBev has reported a steep drop in sales of its Bud Light brand after a collaboration with a transgender TikTok personality prompted a conservative backlash in the US.

The world’s biggest brewer said on Thursday that US revenues dropped 10.5 per cent in the second quarter. The weakness in the key market was “primarily due to the volume decline of Bud Light”, it added.

Sales of Bud Light, which had long been the top-selling beer in the US, tumbled for several weeks after a marketing collaboration in April with Dylan Mulvaney led to calls for a boycott and hit sales.

The controversy caused AB InBev to end the partnership and place two executives on leave.

Its struggles in the US marred an otherwise resilient quarter for the brewer, which reported that overall revenues climbed 7.2 per cent to $15.1bn as it managed to pass on price increases to customers.

AB InBev, which also manufactures Budweiser, Stella Artois and Corona, said on Thursday that earnings before interest, tax, depreciation and amortisation increased 5 per cent in the second quarter to $4.9bn, far ahead of analyst estimates of 0.4 per cent growth.

Drinks volumes fell 1.4 per cent, in line with analysts’ expectations. The company maintained its guidance for the year. 

The company’s shares were up 3.8 per cent to €53 in early trading. Its share price has fallen more than 10 per cent since March on the back of the controversy.

“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,” wrote analysts at RBC Capital Markets.

The Belgium-based brewer insisted on Thursday that despite the controversy, it had surveyed 170,000 consumers and found that 80 per cent had a “favourable or neutral” view towards Bud Light.

But rival brands have already capitalised on the boycott, with Modelo Especial dethroning Bud Light as America’s best-selling beer in June.

Brewer Molson Coors, AB InBev’s biggest competitor in the US, also soaked up some of Bud Light’s market share with its Coors Light and Miller Lite brands, reporting record quarterly sales and upgrading its full-year outlook earlier this week. 

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