AB InBev Stock Jumps as Higher Prices Offset Weak North American Sales

American depositary receipts (ADRs) of Belgian brewing giant Anheuser-Busch InBev (BUD) rose in intraday trading Wednesday following a first-quarter earnings report that included revenue above expectations.

Higher Prices Drive Revenue Growth

The conglomerate behind the Budweiser, Bud Light, Michelob, and Stella Artois beer brands reported revenue growth of about 2.6% compared with the first quarter of 2023.

AB InBev posted $14.55 billion in revenue for the quarter, above analyst estimates compiled by Visible Alpha of $14.4 billion and the Q1 2023 mark of $14.21 billion. Higher prices boosted AB InBev’s revenue, as total volumes were down about 0.6% year-over-year.

AB InBev reported $1.09 billion in profit, or 54 cents per share, below analyst estimates of $1.17 billion and 57 cents per share, as well as last year’s figures.

However, after adjusting for one-time costs like mark-to-market losses related to share-based payment plans and impacts of inflation, AB InBev said its underlying profit was $1.51 billion, or 75 cents per share, above analyst estimates.

“The strength of the beer category, our diversified global footprint and the continued momentum of our megabrands delivered another quarter of broad-based top- and bottom-line growth,” AB InBev CEO Michel Doukeris said. “We are encouraged by our results to start the year, and the consistent execution by our teams and partners reinforces our confidence in delivering on our 2024 growth ambitions.”

International Growth Offsets Weak North America Sales

AB InBev may still be feeling the impact of a boycott that started last year after a Bud Light partnership with transgender influencer Dylan Mulvaney led to it losing its status as the top-selling beer in America to Constellation Brands’ (STZ) Modelo Especial.

Organic revenue fell 8.8% year-over-year in North America and 0.5% in Asia Pacific, while sales grew in the Europe, Middle East, and Africa (EMEA) region (16.3%), the Middle Americas (8%), and South America (5.1%).

Despite weak U.S. sales, AB InBev said the overall beer market in the region has been resilient, with its North America sales improving on a quarterly basis to $3.59 billion compared with the fourth-quarter mark of $3.28 billion.

Shares of AB InBev were up 4.1% to $63.05 as of 1:40 p.m. ET Wednesday. They are down roughly 2.4% in 2024.