BRUSSELS (Reuters) - Anheuser-Busch InBev (ABI.BR), the world’s largest brewer, sold less beer than expected in the third quarter, hit particularly by hurricanes and market share losses in its largest market, the United States.
The maker of Budweiser, Corona and Stella Artois said on Thursday it sold 1.5 percent less beer than a year earlier in North America, Brazil, Europe and Asia, with the steepest fall in the United States.
The Belgium-based company said profits slipped there as hurricanes ripping into Florida and Texas hampered its shipping, although the company’s market share also slipped.
AB InBev said U.S. core profit (EBITDA) declined by 0.7 percent in the third quarter compared to a year ago, with the negative hurricane impact estimated at 2 percentage points.
While it can expect to recover some of the hurricane hit at the end of 2017, there was no clear fix for its two major U.S. brands, Budweiser and Bud Light, both suffering as drinkers shift to higher-priced craft beer as well as cheaper lagers.
Heineken (HEIN.AS), reporting on Wednesday, also had lower sales of its Heineken brand and Mexican lagers in the United States, although Lagunitas, the U.S. craft brand it now fully owns, outperformed the market.
AB InBev has bought 10 U.S. craft breweries in the past six years, but their gains could not prevent an overall share loss.
AB InBev shares were down 2.1 percent at 100.85 euros at 1010 GMT, making them among the weakest in the FTSEurofirst 300 index of leading shares. Its shares trade at a premium to peers Heineken and Carlsberg (CARLb.CO) due to its success to date with acquisitions and sharp focus on costs.
James Edwardes Jones, analyst at RBC Capital Markets, said the U.S. weakness was not just caused by the weather.
“Our view remains that unless and until AB InBev can get volumes growing sustainably the business model will remain under significant pressure,” he said.
Bernstein Securities said it could not remember a quarter so bad for the company’s U.S. sales.
AB InBev did increase profit in Brazil, its second biggest market, for the first time in almost two years in the July-Sept period, with overall volumes down 4 percent, but prices per liter 13.1 percent higher. Heineken had reported higher beer sales in Brazil.
“In Brazil we remain cautiously optimistic about the economy overall with good progress made so far. We remain confident about our commercial plans and therefore we expect a very strong fourth quarter,” Chief Financial Officer Felipe Dutra said. “Yes, Brazil is coming back as one of the growth engines.”
Latin America’s largest economy is emerging unevenly and slowly from its worst recession in more than a century.
Profit grew in its other large markets of Mexico, Colombia, South Africa and China, although beer sales only increased in Mexico.
AB InBev also raised its target for cost savings from last year’s purchase of largest rival SABMiller. It now sees savings of $3.2 billion from $2.8 billion before, having already achieved $1.75 billion to date.
The additional savings were largely to come from better terms for procurement and gains from sharing former AB InBev’s greater efficiency in brewing and acquired SABMiller’s superiority in packaging, Dutra told a conference call.
Overall, third-quarter core profit (earnings before interest, tax, depreciation and amortization) was up 13.8 percent on a like-for-like basis to $5.73 billion, just below the median forecast in a Reuters poll of $5.76 billion.
Reporting by Philip Blenkinsop; Editing by Robert-Jan Bartunek and Jane Merriman