(Bloomberg) -- Heineken NV signaled the longer-term outlook has becomes cloudier as the brewer raises prices to pass higher costs on to consumers, which may weigh on beer consumption.

  • While Heineken is continuing to target a 17% operating margin in 2023, the company will give an update on the outlook later this year amid increased uncertainty about economic growth and inflation. Full-year beer sales in 2021 rose 4.6% on an organic basis. Analysts expected a 4.5% increase.

Key Insights

  • The world’s second-largest brewer is being cautious on the rebound from the pandemic. Heineken warned that a full recovery of business in bars and restaurants in Europe may take longer than the bounceback it expects in the Asia-Pacific region this year.
  • Earlier this month, Danish rival Carlsberg A/S set a bearish tone for the industry when it said 2022 would be a challenging year as the pandemic and higher costs weigh on brewers, giving a wide earnings forecast that includes the possibility of no growth.
  • This week, shareholders of South African wine and spirits maker Distell Group Holdings Ltd. voted in favor of being acquired by Heineken, which creates a new regional group to compete with larger competitors Anheuser-Busch InBev NV and liquor giant Diageo Plc.

Market Action

  • The stock rose 11% in the past year.

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