By Anheuser-Busch InBev, despite facing ongoing challenges from the Bud Light controversy, has reported a slight improvement in its third-quarter profit. The company attributed this improvement to cost control measures and revenue growth in 80% of its global markets.
According to Anheuser-Busch InBev, their net profit for the third quarter increased to $1.47 billion, compared to $1.43 billion in the previous year. Additionally, the company’s revenue rose to $15.57 billion from $15.09 billion. The underlying earnings per share also showed an increase from 84 cents to 86 cents.
Although analysts predicted earnings of 85 cents per share and revenue of $15.79 billion, Anheuser-Busch InBev surpassed these expectations.
However, the situation in the United States remains challenging for the company. Operating profit in the U.S. decreased by 29.3% due to a 13.5% drop in revenue. Anheuser-Busch InBev attributed approximately two-thirds of this profit decline to market share performance and the remaining portion to productivity loss, increased sales and marketing investments, and support measures for their wholesaler partners.
Sales in the U.S. have been declining following a social media post by transgender star Dylan Mulvaney, which triggered both anger and confusion among customers regarding a personalized can of Bud Light. Despite this setback, Anheuser-Busch InBev emphasized that the total beer market share in the U.S. has remained stable since the end of April.
It is important to note that Mulvaney’s post has not affected business outside the U.S., particularly in countries like Colombia, Mexico, and Brazil.
In an effort to drive growth and reiterate its guidance for the year, the company has announced a $1 billion stock buyback and a $3 billion debt buyback.
While the announcement of the buybacks has provided some reassurance and caused a 4% increase in AB InBev shares in early Brussels trade, it is worth mentioning that the stock is still down 15% since the end of March. Analysts at Citi, led by Simon Hales, noted that the reliance on Argentina for top-line organic sales growth and ongoing foreign exchange headwinds may impact the share price reaction.
Overall, Anheuser-Busch InBev is navigating through challenges posed by the Bud Light controversy along with its efforts to maintain profitability and grow its revenue in various markets worldwide.
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