BRUSSELS (Reuters) - Anheuser-Busch InBev (ABI.BR), the world’s largest brewer, suffered a fall in volumes in the United States, its biggest market, offsetting a boost from the soccer World Cup to sales of premium lagers in Europe and Latin America.
Shares in the Belgium-based brewer of Budweiser, Stella Artois and Corona fell 5.3 percent in early trading on Thursday, making them among the weakest in the FTSEurofirst index of leading European shares .FTEU3.
The company reported a higher than expected core profit but lower than expected earnings per share, with market attention drawn to the performance of its U.S. operations where sales to wholesalers dropped by 5.1 percent.
There, its Budweiser and Bud Light lost market share as consumers traded up to higher-priced products such as craft beer, while freight costs rose and aluminum prices were higher, even before the impact of U.S. tariffs.
“The U.S. trends are weaker than expected. Every other region did well,” said beverages analyst Trevor Stirling of Bernstein Research.
The company said revenue and core profit would rise strongly in 2018, with growth accelerating in the rest of the year. It said it aimed to increase revenue per hectolitre by more than the rate of inflation, essentially by persuading consumers to shift to more expensive beers.
Revenue from higher-margin premium lagers rose in many markets at more than double the rate of growth for the company as a whole. Part of the improvement was due to AB InBev’s sponsorship of the World Cup, principally involving Budweiser.
Other than the United States, earnings grew in all its major markets, including in South Africa despite lower volumes.
In the United States, sales to retailers, more reflective of actual consumption, were down a more modest 3.1 percent. AB InBev said that about half of the market decline resulted from the earlier Easter and the Fourth of July holiday falling in midweek.
In its second-largest market, Brazil, the positive impact of the World Cup was almost wiped out by the hit from a truckers strike in May over higher diesel prices, but price increases ensured healthy profits.
Finance Director Felipe Dutra said the World Cup would increase annual company volumes by between 0.35 and 0.40 percentage points, with for example increased drinking during normally slack winter weekdays in Brazil and Argentina.
Second-quarter core profit or EBTIDA rose 7.0 percent on a like-for-like basis to $5.57 billion, above the average forecast in a Reuters poll of $5.49 billion.
Earnings per share increased by 15.8 percent to $1.10, below the average expectation of $1.15.
Reporting by Philip Blenkinsop; Editing by Robert-Jan Bartunek and David Holmes