Anheuser-Busch InBev NV kept its annual profit forecast and announced a $1 billion share buyback, even as US sales remained weaker following a Bud Light marketing controversy and global volumes fell in the third quarter.
The maker of Budweiser and Stella Artois said it still expects earnings to rise between 4% and 8% this fiscal year, after reporting a 4.1% rise in adjusted earnings to $5.4 billion during the period. This was in line with estimates.
AB InBev stock rose nearly 4% in early trading.
The Leuven, Belgium-based company has sought to move on after its work with Dylan Mulvaney, a transgender influencer who did a sponsored Instagram post for Bud Light in April, led to a backlash among political conservatives in the US. AB InBev subsequently cut ties with Mulvaney, which triggered the ire of her supporters.
The company said US sales dropped 13.5% amid the Bud Light issue, while price hikes there led to revenue per hectoliter, a key metric of pricing power, rising by 4.9%. Overall, North American sales fell more than expected.
Beer makers have been raising prices to offset soaring input costs but that risks cash-strapped consumers switching to cheaper beer.
Organic volume growth fell by 3.4%, beyond the expectation of a 2.3% decline.
The brewer’s sales in Brazil, one of its best performing markets, rose 5.3% during the quarter, with revenue per hectoliter climbing 5.5%.
“Although volumes were weaker than expected, organic sales and EBITDA were ahead,” said Edward Mundy, an analyst at Jefferies. He added that the share buyback also sent a message that the “company views share price as attractive and points to balance sheet repair.”
The company posted global sales of $15.6 billion, just slightly below the $15.8 billion expected by analysts.
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