BUD stock weakened Friday after Budweiser, Bud Light, and Michelob Ultra maker Anheuser-Busch InBev cleared estimates for its first-quarter results early Thursday. Global sales volumes rose and BUD stock surged Thursday, but the recent U.S. Bud Light boycott pressured the brewer's Q2 market share.
Anheuser-Busch Earnings
Results: Anheuser-Busch's earning rose 8.3% to 65 cents per share on 13.2% revenue growth to $14.2 billion.
Expectations: Analysts expected Anheuser-Busch earnings to tumble 11.9% to 59 cents per share on 6.3% revenue growth to $14.1 billion.
Outlook: Anheuser-Busch guided 2023 earnings before interest, taxes, depreciation, amortization (EBITDA) growth between 4% to 8%, which is in-line with its medium-term outlook. The company sees revenue growth ahead of EBITDA "from a healthy combination of volume and price."
For the year, FactSet forecasts earnings edging up to 0.6% on 7.6% revenue growth to $62.19 billion.
The Brussels-based company did not report specific sales numbers for its beer brands in the earnings release. But Bud Light sales took a major hit in April following an ad boycott.
Bud Light Marketing Controversy
Bud Light and Anheuser-Busch faced boycotts in early April after partnering with transgender influencer Dylan Mulvaney to promote Bud Light and a sweepstakes challenge during March Madness — the National Collegiate Athletic Association's championship basketball tournament.
On April 1, the popular influencer, who has more than 12.5 million followers across TikTok and Instagram, posted a video in which Mulvaney cracks a can of Bud Light while dressed as Audrey Hepburn's character Holly Golightly from the film "Breakfast at Tiffany's." The caption included details about the sweepstakes and the hashtag #budlightpartner. The customized Bud Light can that appears in the video features Mulvaney's image.
The post sparked praise and outrage across the political spectrum. Public boycotts among conservative consumers quickly spread on social media. Georgia Rep. Marjorie Taylor Greene and country singer Kid Rock were among those leading the protest against the Bud Light brand.
Market Roars, But Don't Go Wild; What To Do Now
Bud Light Volume Dives
Bud Light volume sales, including sales at grocery, convenience and liquor stores, tumbled 26.1% year-over-year for the week ending April 22, trade publication Beer Business Daily reported Sunday. For the week ending April 15, volumes were down 21.1%. Bud Light sales volumes are down 8% so far this year.
"This was the result of one can. It was not made for production or the general public," CEO Michel Doukeris said in the earnings call, adding it was just one social media post and one influencer. However, it's still too early to determine the full impact of the boycott or forecast when it may subside, he said. Doukeris noted there was some spillover to other brands but did not clarify specifics.
"Everything we should do should be about beer," Doukeris said. "Beer itself should not be the focus of the debate."
He said the situation has negatively impacted its employees and front-line workers as the boycott ensued. Doukeris said Anheuser is increasing financial support for its affected front line workers in U.S., as well as its investments in the brand.
The company will triple its planned investments around Bud Light over the summer, Doukeris said in the earnings call. And Anheuser-Busch will focus its marketing on sports and music.
The Bud Light sales decline only represents 1% of its global sales during that period, Doukeris said. He added the company has the resources to maintain its global business and support the U.S. team.
Competitor's Sales Surge
Meanwhile, Molson Coors Beverage saw its Coors Light volume jumped 13.3% during the third week of April, while Miller Lite sales volume leapt 13.6%. There's been a nearly one-for-one swap in market share between Coors Light and Miller Lite vs Bud Light in that time, according to Beer Business Daily.
"The shocking deterioration of Bud Light Blue's market share continued apace through the third week of April —- and actually somehow worsened," Beer Business Daily wrote on its website. "We've never seen such a dramatic shift in national share in such a short period of time."
Alissa Heinerscheid, Bud Light's vice president for marketing on the project, took a leave of absence following the boycott. Daniel Blake, Anheuser-Bush's vice president overseeing mainstream brands, was also placed on leave, the Wall Street Journal reported.
BUD Stock
Anheuser-Busch InBev trades as American depositary receipts (ADRs) under the BUD ticker on the New York Stock Exchange.
BUD stock eased 1.6% Friday, nearly halving its Thursday gains. Shares surged 3.5% to 65.90 Thursday following earnings.
BUD stock is trading in a buy zone for a flat base after surpassing the 61.99 buy point on March 3. The current buy zone, which extends 5% beyond the buy point, stretches to 65.
Shares are also rebounding from a test of support at their 10-week moving average.
Anheuser-Bush's relative strength line is off recent highs and it has a 90 RS Rating.
BUD stock is up 9.5% over the past three months and 8% year-to-date.
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