Anheuser-Busch InBev (BUD) stock dropped more than 11% on Thursday after the company missed Wall Street estimates for revenue and volume, raising broader concerns about the health of the beverage industry.
The global brewer’s overall sales volume declined 1.9%, contrary to analyst projections of a slight gain. The company reported quarterly revenue of $15 billion, falling short of the expected $15.35 billion. The disappointing results were driven by significant volume declines in key international markets, including a 7.4% drop in China and a 6.5% decrease in Brazil.
AB InBev CEO Michel Doukeris attributed the underperformance in China to the company’s heavy reliance on bars and restaurants over at-home consumption. He noted that in Brazil, poor weather and a shift toward value-seeking consumer behavior impacted sales, though he remains confident in the market’s long-term potential.
In the United States, the industry experienced overall softness as consumers became more selective. AB InBev’s sales to retailers fell 2.1% during the quarter. Doukeris highlighted that amid persistent inflation, value brands like Busch Light are growing, particularly with lower-income consumers.
The company is also adapting to a growing consumer focus on health and wellness. Doukeris pointed to the success of low-calorie brands like Michelob Ultra and a global portfolio of non-alcoholic options, such as Corona Cero and Cass Zero, designed to meet demand from consumers who want to remain social while controlling their consumption.
Thursday’s sharp decline sent AB InBev’s stock to its lowest price since the pandemic market crash in March 2020. The negative report also impacted competitors, with shares of Molson Coors (TAP) and Constellation Brands (STZ) trading lower.
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