BUD stock weakened on Friday after Budweiser, Bud Light and Michelob Ultra maker Anheuser-Busch InBev (bud) surveyed estimates for first-quarter results early Thursday. Global sales volumes rose and BUD stock rose Thursday, but the recent US Bud Lite boycott pressured beer’s market share in the second quarter.
X
Anheuser-Busch Earnings
resultsAnheuser-Busch earnings rose 8.3% to 65 cents per share on revenue growth of 13.2% to $14.2 billion.
expectationsAnalysts had expected Anheuser-Busch earnings to decline 11.9% to 59 cents per share on revenue growth of 6.3% to $14.1 billion.
prospectsAnheuser-Busch has guided 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of between 4% to 8%, which is in line with its medium-term outlook. The company sees revenue growth ahead of EBITDA “from a healthy mix of volume and price.”
For the year, FactSet expects earnings to rise 0.6% on revenue growth of 7.6% to $62.19 billion.
The Brussels-based company did not report specific sales figures for its beer brands in its earnings statement. But Bud Light sales took a huge hit in April after an advertising 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 basketball tournament.
On April 1, the popular influencer, who has more than 12.5 million followers across TikTok and Instagram, posted a video where Mulvaney broke out a can of Bud Light while dressed as Audrey Hepburn’s character Holly Golightly from “Breakfast at Tiffany’s.” The caption included details about the sweepstakes and the hashtag #budlightpartner. The custom bud light box seen in the video features Mulvaney’s photo.
The post sparked praise and outrage across the political spectrum. Public boycotts among conservative consumers spread quickly on social media. Georgia representative Marjorie Taylor Greene and country singer Kid Rock were among those leading the protest against the Bud Light brand.
Lightweight bud dive
Bud Lite volume sales, including those at groceries, groceries and liquor stores, fell 26.1% year-over-year for the week ended April 22, a trade publication Bear Business Daily reported Sunday. In the week ending April 15, trading volumes decreased by 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 Docris said on the earnings call, adding that it was just one social media post and one influencer. However, it is still too early to say the full impact of the boycott or to predict when it will abate, he said. Docris noted that there were some spillover effects on other brands, but did not elaborate.
“Everything we do should be about beer,” said Docris. “The beer itself should not be the focus of the discussion.”
He said the situation had negatively affected its staff and frontline workers as the boycott began. Docris said Anheuser is increasing financial support for affected frontline workers in the United States, as well as its investment in the brand.
Docris said on the earnings call that the company will triple its planned investment around Pod Lite over the summer. Anheuser-Busch will focus its marketing on sports and music.
The decline in Bud Light sales only represented 1% of its global sales during that period, Docris said. He added that the company has the resources to maintain its global business and support the US team.
Increase competitor sales
while, Molson Coors drink (handleCoors Light sales volume jumped 13.3% during the third week of April, while Miller Lite sales volume jumped 13.6%. There was a nearly one-for-one market share trade-off between Coors Light, Miller Lite and Bud Light at the time, according to Beer Business Daily.
“The appalling deterioration in Bud Light Blue’s market share continued apace through the third week of April — and has, in fact, worsened somewhat,” Bear Business Daily wrote on its website. We have never seen such a dramatic shift in the national share in such a short period of time.
Alisa Heinscheid, Bud Light’s vice president of marketing on the project, took a leave of absence after the boycott. The Wall Street Journal reported that Daniel Blake, an Anheuser-Bush vice president who oversees major brands, has been placed on leave.
BUD stock
Anheuser-Busch InBev trades as American Depositary Receipts (ADRs) under the ticker BUD on the New York Stock Exchange.
BUD stock fell 1.6% on Friday, trimming Thursday’s gains by nearly half. Shares rose 3.5% to 65.90 Thursday, following the earnings.
BUD stock is trading in a flat-base buy zone after crossing the buy point of 61.99 on March 3. The current buy zone, which extends 5% beyond the buy point, is 65.
Stocks are also bouncing back from a test of support at the 10-week moving average.
The Anheuser-Bush RSI is off recent highs and has a rating of 90 RS.
BUD stock is up 9.5% over the past three months and 8% year-to-date.
You can follow Harrison Miller for more stock news and updates on Twitter @employee
You may also like:
Looking for the next big stock market winners? Get started with these three steps
Learn how to time the market with IBD’s ETF market strategy
Short-term trades can add up to big profits; IBD’s SwingTrader shows you how
Futures: Apple Soars on iPhone Sales; Cathy Wood stock jump
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”