AB InBev shares tumble as sales slide in China and Brazil

Reuters

2 days ago

LONDON, July 31 (Reuters) - Brewer Anheuser-Busch InBev (ABI.BR), opens new tab said on Thursday its second-quarter sales volumes fell more than expected due to weak demand in Brazil and China, adding to investor worries over industry growth and sending its shares to a five-month low.
Shares in AB InBev, maker of brands including Corona and Stella Artois, were down 10.5% by 1133, hitting their lowest since February and heading for their biggest single-day decline since 2020.
Volumes at the world's largest brewer by sales fell 1.9% in the three months through June, versus analyst expectations for a 0.3% decline, with a sharp 9% drop in Brazil a particular negative.
In China, where AB InBev has been struggling to keep pace with growth at rivals, its volumes fell 7.4%.
The company did however report revenue and profit growth, with the latter ahead of forecasts at 6.5%.
CEO Michel Doukeris told Reuters by phone that Brazil had been hit by poor weather, which had extended throughout the beginning of July.
"Our brands remain healthy. We had very good growth for premium brands," he said, adding the company could deliver both in Brazil and across South Africa in the second half.
AB InBev has in recent quarters consistently outperformed expectations on profits and increased revenues by getting drinkers to pay more for its beers. But it, and other top brewers, have struggled to get volumes growing.
Rival Heineken (HEIN.AS), opens new tab also sounded cautious about volumes on Monday, citing tariff uncertainties, sending its shares over 8% lower.
Heineken said that U.S. tariff threats had hit consumer confidence and dented beer sales both in the U.S. and elsewhere in the Americas - key regions for AB InBev. But AB InBev did not cite this as a factor.
For AB InBev, analysts pointed to bright spots, including in North America, where the company performed better than expected.
But problems in Brazil, where AB InBev had underperformed the wider industry, overshadowed this, according to Siphelele Mdudu, investment analyst at Matrix Fund Managers, an AB InBev investor.
Mdudu noted, however, that Heineken had grown market share in Brazil, and was planning to up competition there including via a new brewery opening this year.
"In your own backyard, Brazil, you've lost volumes," he said, adding AB InBev "cannot afford to disappoint" in such key markets.