AB InBev reports resilient earnings despite Bud Light marketing controversy

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Sales in Bud Light, one of the best-selling beers in the US, fell sharply after a marketing campaign with a transgender TikTok influencer led to calls for a boycott. The group’s total US revenue subsequently slipped by 10.5% during the three-month period ended June 30, which it said was “primarily due to the volume decline of Bud Light.”

North America represents a key market for AB InBev, making up around one-sixth of its total volumes sold last year. The Leuven, Belgium-based business noted that its US beer share has stabilized since the last week of April through the end of June, adding that a survey of 170,000 consumers found that 80% had a “favorable or neutral” opinion of the company.

The US slump was offset by strength in the company’s operations in key countries like Brazil and China, which analysts at RBC Capital Markets called an “impressive demonstration” of AB InBev’s resilience and diversification.

Quarterly organic earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 5.0%, topping estimates for slight growth of 0.4%. Normalized core earnings of $4.91 billion also beat consensus estimates of $4.86B.

AB InBev also reiterated its 2023 guidance for EBITDA growth of between 4% to 8%, in line with its medium-term target. Wall Street is forecasting an increase of 4.4%.

Belgium-listed shares in AB InBev (EBR:ABI) also jumped on Thursday, although the stock has been under pressure following the Bud Light marketing controversy.