(Bloomberg) -- Anheuser-Busch InBev NV said beer volumes fell more than expected after continued weaker sales in China and Argentina.
The world’s biggest brewer and Budweiser maker said volumes fell 2.4% in the third quarter, more than a consensus of analysts compiled by Bloomberg. The company also announced a share buyback of $2 billion over the next 12 months.
AB InBev is among the brewers affected by a slowdown in consumer spending in the US and Asia that’s leading drinkers to buy cheaper beer. It’s invested in marketing to push its beer brands, including Michelob, which sponsored Team USA at the Paris Olympics.
In China, where AB InBev sells global brands as well as local beers such as Sedrin and Harbin, sales fell 16.1% during the quarter, largely due to poor performance in bars and restaurants as consumers cut back, the company said.
Sales in Argentina were hit by inflationary pressure which hurt spending.
Shares of AB InBev slid 4% on the news in early trading Thursday, taking the stock down more than 3% since the start of the year.
The company, whose beers also include Stella Artois and Beck’s, said organic earnings before interest, taxes, depreciation and amortization would be at the upper end of guidance, between 6-8%, according to a statement Thursday. Organic adjusted EBITDA rose less than analysts had expected in the quarter, however the company has targeted cost savings to improve margins.
It also said volumes are growing in half of its markets and its market shares were improving in the US, where Michelob Ultra and Busch Light were the two top three volume share gainers in the industry.
Corona, which AB InBev sells outside the US grew by more than 10% globally, and was its flagship beer at this year’s Paris Olympic Games, where Corona was the global beer partner.
The strong momentum created the room to conduct the share buyback, the company said.
AB InBev’s third quarter was “weak but not terrible,” said James Edwardes Jones, an analyst at RBC Capital Markets, but noted that China was very soft.
(Updated with shares and analyst comment starting from fifth paragraph.)
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