(Bloomberg) -- Heineken NV shares slumped after the world’s second-biggest brewer warned that persistent inflation and economic worries will weigh on beer demand in 2024.

The Dutch brewer gave a wide-ranging operating profit growth forecast of low to high single digits for 2024 as the premium beer market faces challenges. Earnings and sales rose less than expected last year as volumes declined. The stock fell as much as 6.5% Wednesday morning in Amsterdam, the steepest intraday drop in more than five months.

“We feel good about where the company is going, but we continue to do that in a turbulent world so that’s why we have deliberately chosen a relatively wide range,” Heineken Chairman and Chief Executive Officer Dolf van den Brink said in an interview.

The Dutch brewer has been raising prices to keep revenue growing even as volumes decline. Heineken raised beer prices by double digits in the first half of last year and high single digits in the second. It expects the pace of price increases to moderate this year, but says input costs are still rising.

“Pricing has impacted volumes, that’s obvious. What’s good to see is that we are seeing inflation starting to taper and consequently we are also starting to moderate the pricing that we need to offset input cost inflation,” van den Brink said.

The company said Wednesday it remains cautious about the global economic and geopolitical outlook and its focus will be on revenue growth that’s balanced between volume and price.

The full-year guidance appears “underwhelming,” RBC Europe analyst James Edwardes Jones said in a note to clients. He said the widespread expectation from investors was a “significant margin tailwind as commodity costs decline.”

Analysts expect the company to post organic revenue growth of 5.3% on operating income of €4.9 billion ($5.3 billion) in 2024, according to consensus estimates compiled by Bloomberg.

The world’s second-largest brewer, best known for its premium namesake brand, has been grappling with dismal conditions in the key beer markets of Vietnam and Nigeria. A wet summer in Europe also hurt sales in 2023. 

The Amsterdam-based company said full-year revenue rose 5.5% on an organic basis, missing analyst expectations of a 5.8% increase. Operating income was up slightly at €4.4 billion, shy of the €4.5 billion from analyst estimates. 

Beer volumes fell 4.7% on an organic basis, more than the estimate of a 4.4% decline.

The results follow smaller rival Carlsberg A/S, which also gave a cautious outlook last week. It forecast moderate operating profit growth between 1% and 5% this year as beer drinkers cut back. 

Top brewer Anheuser-Busch InBev SA is scheduled to report its full year results at the end of the month. 

--With assistance from Sarah Jacob.

(Updates with shares in second paragraph)

©2024 Bloomberg L.P.