Key Takeaways:
- Anheuser-Busch InBev, the owner of Budweiser, missed analyst expectations for annual revenue and profit, albeit slightly.
- The company outperformed expectations in the fourth quarter, despite facing challenges.
- An overall decline in sales was offset by revenue growth driven by price increases.
- The impact of a social media-led boycott of Bud Light in the U.S. was evident in the latest results.
- Despite the boycott, the company demonstrated resilience in navigating market challenges, particularly in the fourth quarter.
Anheuser-Busch InBev saw growth in both profit and revenue over the past year, largely driven by increases in beer prices. However, the company faced challenges in the U.S. market, particularly with its Bud Light brand, which experienced a decline in sales due to a social media-led boycott.
The company reported annual revenue of $59.38 billion, a 7.8% increase, although falling short of analyst expectations. Despite the revenue growth, volumes sold decreased by 1.7%, with beer brands experiencing a 2.3% decline.
Core profit (EBITDA) rose by 7% annually to nearly $20 billion, slightly below the forecast. In the fourth quarter, sales exceeded expectations with a growth rate of 6.2%. However, revenue in the U.S. declined by 17.3%, primarily due to a 12.1% drop in sales-to-retailers. Bud Light, once the best-selling U.S. beer, saw significant sales declines.
Anheuser-Busch InBev faced challenges from a social media-driven boycott of its Bud Light brand, as well as broader industry struggles related to higher input costs and reduced consumer spending.
Despite these challenges, the company announced a full-year dividend increase to 0.82 euros ($0.89) from 0.75 euros in 2022. CEO Michel Doukeris emphasized the resilience of the business, attributing the positive results to the strength of the beer category, consistent execution of growth strategies, and long-term investment commitment.
Analysts at Bernstein characterized Anheuser-Busch InBev’s performance in 2023 as ending on a solid note, attributing this to price increases that offset declining sales. However, they expressed caution regarding the company’s guidance and the challenging pricing environment in the USA.
The analysts highlighted that sales trends in the final quarter were weaker than anticipated, largely due to ongoing challenges in North America stemming from the impact on Bud Light. Despite these concerns, China emerged as a bright spot for the company, with profits rising by 32%. This growth was driven by the strong performance of premium products in the Chinese market.