Beer giant AB InBev beats profit estimates, with Bud Light boycott set to ease one year on

Shares of Belgium’s AB InBev rose 5% Wednesday morning after the company posted higher revenue and profit in the first quarter, as analysts said it had escaped the drag from a year-long boycott of its Bud Light brand relatively unscathed.

The world’s biggest brewer, whose brands include Corona and Stella Artois, notched a 2.6% revenue increase year-on-year to $14.55 billion in the first quarter, narrowly ahead of analyst estimates. That was despite a 0.6% drop in volumes that the brewer sold.

Underlying profit attributable to shareholders was higher at $1.5 billion, also above an LSEG-compiled consensus.

A social media-led campaign against Bud Light in response to a sponsorship partnership with transgender influencer Dylan Mulvaney started in April 2023, making this the last quarter likely to be negatively impacted by a year-on-year comparison.

Former U.S. President Donald Trump in February urged his followers on social media to give the company a “second chance.”

The furore toppled the brand’s status as the best-selling U.S. beer, but also generated criticism of the company for failing to support Mulvaney. It has prompted wider discussion in the advertising industry about corporations fearing backlash for promoting diversity or inclusivity.

AB InBev’s Europe CEO Jason Warner told the U.K.’s Telegraph newspaper earlier this week that the drinks firm will “stay in our lane” following the reaction to the campaign, which had sought to reach a wider range of consumers.

The company nonetheless managed to increase revenue by 7.8% last year, driven by higher sales in the Asia-Pacific and Central America regions.

The first-quarter results showed a 11.1% drop in sales of AB InBev’s own beer brands in North America, which it said was primarily due to Bud Light. Revenue meanwhile declined 2.7% in China as sales dropped 6.2%. The drop was in-line with a wider industry retreat related to China’s reopening last year and poor weather in March, the company said.

However, sales were at record highs in Brazil and Colombia, and grew firmly in Europe, Mexico and South Africa. The results also flagged growth in its Corona brand, particularly for its non-alcoholic beer brand Corona Cero.