Anheuser-Busch InBev, the world's largest brewer, reported higher than expected first-quarter earnings as consumers bought its beers at sharply higher prices.
The maker of Budweiser, Stella Artois and Corona repeated its 2023 forecast that core profit would grow in line with its medium term outlook of between 4% and 8%, with revenue to grow ahead of EBITDA.
Asia-Pacific Boosts Sales
The company's beer sales were 0.4% higher overall in the first quarter than a year ago, though only because of a sharp rise in the Asia-Pacific region as China steadily rolled back its COVID-19 restrictions. Volumes in all other regions dipped.
Revenue, however, rose sharply, as the company pushed through price increases and some consumers switched to more expensive beers or package formats.
First-quarter results of AB InBev's rivals Heineken and Carlsberg also showed consumer willingness to absorb higher prices.
AB InBev's core profit rose by 13.6% on a like-for-like basis to $4.76 billion (€4.3 billion), compared with the 5.6% average increase expected in a company-compiled poll.
Some analysts said the strong first quarter might have led AB InBev to raise its guidance, but suggested a U.S. conservative backlash against Bud Light over a social media promotion by a transgender influencer could be cause for caution.
“We continue to invest for the long-term and these results reinforce our confidence in the resilience of the beer category, the effectiveness of our strategy and the strength of our platform to deliver consistent profitable growth," said Michel Doukeris, CEO, AB InBev.
Commenting on the group's performance, analyst Laurence Whyatt of Barclays noted, "Of particular note is the strong improvement in margins. This quarter should be the most challenging from a COGS perspective, yet margins expanded by 13bps.
"We should therefore give credit to ABI’s level of pricing – it was not many years ago when ABI was often accused of being the price laggard. These results give further evidence that the company has turned this leaf over long ago."