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Anheuser-Busch InBev shares dropped the most in five years after the company sold less beer than expected during the second quarter, with a downturn in consumer spending in Brazil and China dragging on sales.
The world’s biggest brewer reported a 1.9 percent fall in organic volume, according to a statement Thursday, missing analyst estimates for a slight increase.
Consumers in Brazil have been more cautious, compounding a slowdown in China where fewer people have been drinking in bars. Shares in the company fell 11 percent in Brussels, the biggest intraday decline since March 2020, erasing €10.2 billion ($11.6 billion) off its market value.
A “weaker volume backdrop and LatAm performance, and absence of incremental cash returns” were expected to weigh on shares, Citi analyst Simon Hales said in a note.
Some investors had been expecting a further share buyback, which Jefferies analysts are now predicting in the third quarter.
Brazil, where AB InBev sells brands such as Brahma and Skol, has been a weak spot for brewers globally, with Heineken NV also cautious on consumers there. However, AB InBev said it had underperformed the market and volumes fell 4.9 percent in South America, disappointing estimates for 1.3 percent growth, with results in Brazil hit by bad weather.
The company also reported weaker than expected volumes in Europe and the Middle East, pushing it to disappoint in all regions except North America. China has been challenging for brewers since last year, as a pullback in corporate hospitality and a slowdown in consumer spending pushed drinkers to buy beer to have at home rather than drinking in bars.
AB InBev also underperformed the industry there, where it sells brands including Budweiser and Stella, the company said.
A “meaningful volume miss” was mainly caused by the decline in Brazil, RBC analyst James Edwardes Jones said in a note, adding that “much better than expected. — Bloomberg
