By Steve Goldstein
AB InBev stock sees worst day since COVID struck after volume miss
The worst stock-market slide in five years on Thursday wasn’t denting the long-term enthusiasm that Anheuser-Busch InBev CFO Fernando Tennenbaum has for the beer industry.
“When you forecast forward, it’s all about demographics and economics,” he told MarketWatch in an interview. “There is no rocket science in that.”
And what was notable was his view on beer consumption by younger demographics, and his denial that there was anything structural.
“There’s a lot of different studies about this topic,” he said, pointing to a study from Bernstein Research, among others. The demographic of those between 21 and 23 years old saw a modest decline in alcohol consumption that quickly normalized once they got past those years, he said.
“At the end of the day, if you think about it, this is the COVID generation. And they are doing everything later. Remember, they didn’t socialize the same way the previous generations did. They spent a lot of their college years in front of a computer, not going out with friends, not leaving home the same way previous generations did.”
Tennenbaum said the new generation of young adults is now consuming alcohol at similar rates as before COVID.
AB InBev shares (BE:ABI) (BUD) fell as much as 11% as the brewer on Thursday reported declining volumes in the second quarter.
“It’s very hard for me to speculate, one way or the other,” he said about the reasons for the share-price decline.
Volumes slumped by 1.9%, weighed down by its performance in China and Brazil. Analysts had expected a 0.3% decline. But Tennenbaum stressed that volumes outside of those two countries rose 0.7%. “If you zoom in and try to understand, you see that most of our markets were healthy,” he said.
The brewer of brands including Budweiser, Corona, Michelob and Stella Artois said its profit rose 14% to $1.67 billion, while revenue fell 2% to $15 billion.
Analysts polled by Visible Alpha expected a $1.94 billion profit on revenue of $15.28 billion, though its underlying earnings of 98 cents a share topped estimates by 2 cents.
Tennenbaum pointed out that both earnings and cash flow improved during the quarter.
The company stuck to its target of Ebitda growth between 4% and 8% this year.
It also didn’t announce a stock buyback, which may have been a concern for some investors.
Tennenbaum said the company’s capital-allocation plans haven’t changed as it made progress on deleveraging and cash flow. “If you look at share buybacks, two years ago we announced $1 billion and then we completed it, and last year, we announced it at $2 billion and we completed it.”
“When we feel it’s appropriate, we can make further announcements,” he said.
Anheuser-Busch did have some successes during the quarter – no-alcohol beer revenue shot up 33% and Michelob Ultra and Busch Light were the top volume share gainers in the U.S.
“What is different these days than in the past is that the quality of the non-alcohol beer is very high. Most people cannot tell the difference between one and another [alcoholic version], so they can have the products they love in new occasions that were not available to them,” he said.
-Steve Goldstein
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07-31-25 0817ET
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