Anheuser-Busch (BUD) Stock Soars Despite Boycott Challenges: A Deep Dive into Earnings Report

• Anheuser-Busch InBev (BUD) stock rallies after surpassing Q1 estimates despite a decline in Bud Light demand.
• The company reported a 15.4% increase in earnings and a 2.6% rise in revenue.
• However, total beverage volumes declined by 0.6%, with a significant drop in U.S. revenue and Bud Light sales.

Anheuser-Busch InBev’s stock sees an early rally following Q1 results that exceeded expectations, despite a dip in Bud Light demand due to an ongoing boycott.

Q1 Results Surpass Expectations

Anheuser-Busch InBev reported a 15.4% increase in earnings to 75 cents per share, beating FactSet expectations of 66 cents. Revenue climbed 2.6% to $14.55 billion, ahead of analyst forecasts of $14.43 billion. Despite these positive figures, the company saw a decline in total beverage volumes by 0.6% for the quarter, with a 1.3% decline in its owned-beer volumes. Non-beer beverage volumes, however, increased by 3.5%.

Decline in U.S. Revenue and Bud Light Sales

The Belgium-based brewer noted a 9.1% drop in U.S. revenue in Q1. Sales to U.S. retailers dropped 13.7%, primarily driven by volume declines in Bud Light. Sales to wholesalers decreased 10.1% as first-quarter shipments caught up with depletions in December 2023. Despite these challenges, the company expects its 2024 EBITDA to grow in-line with its medium-term outlook of 4% to 8% growth, considering inflation and macroeconomic conditions. FactSet analysts predict EBITDA rises 7.8% to $21.53 billion.

Anheuser-Busch Stock Performance

Anheuser-Busch is primarily listed on the Euronext exchange under the ticker ABI. In the U.S., it trades in American depositary receipts (ADRs) under the ticker BUD on the New York Stock Exchange. The stock rallied 4.8% early Wednesday, on track to extend its advance above resistance at the 50-day moving average. BUD stock rebounded above that technical line on Tuesday after testing its 200-day line. However, AB InBev has retreated about 6.3% in 2024 through Tuesday’s close.

Conclusion

Despite the ongoing Bud Light boycott impacting sales, Anheuser-Busch InBev managed to surpass Q1 estimates, leading to an early rally in its stock. The company remains optimistic about its 2024 EBITDA growth, projecting it to be in line with its medium-term outlook. However, the performance of BUD stock in the coming quarters will be crucial, given the current market conditions and the decline in Bud Light sales.