AB InBev shares slide on concern over sales volumes

By Emma Rumney

LONDON (Reuters) -Beer giant Anheuser-Busch InBev said on Thursday its second quarter sales volumes fell more than expected due to weak demand in Brazil and China, adding to investor worries over industry growth and hitting its shares.

The world’s largest brewer by sales said volumes fell 1.9% in the three months to end-June, versus analyst expectations for a 0.3% decline.

Rival Heineken also sounded cautious about volumes on Monday, citing tariff uncertainties, sending its shares over 8% lower.

At 0745 GMT, AB InBev shares were down 9.5% at 0819 GMT.

The maker of Corona and Stella Artois beers did report revenue and profit growth, however, with the latter ahead of forecasts at 6.5%.

The company said its performance showed the resilience of its strategy in what CEO Michel Doukeris described as a “dynamic” operating environment.

AB InBev has in recent quarters consistently outperformed expectations on profits and increased revenues by getting drinkers to pay more for its beers. But it, and other top brewers, have struggled to get volumes growing.

Heineken said that U.S. tariff threats had hit consumer confidence and dented beer sales both in the U.S. and elsewhere in the Americas – key regions for AB InBev.

But AB InBev did not mention trade tensions in its statement, putting soft industry sales in markets like Mexico down to poor weather.

Analysts pointed to bright spots, including in North America, where AB InBev performed better than expected.

But Siphelele Mdudu, investment analyst at AB InBev investor Matrix Fund Managers, said this was overshadowed by problems: the biggest being a 9% decline in volumes in Brazil.

AB InBev put this down to bad weather, but also said it had underperformed the wider industry.

Mdudu noted, however, that Heineken had grown share in Brazil, and was planning to up competition there including via a new brewery opening this year.

“In your own backyard, Brazil, you’ve lost volumes,” he said, adding AB InBev “cannot afford to disappoint” in such key markets.

In China, where AB InBev has been struggling to keep pace with growth at rivals, its volumes fell 7.4%.

(Reporting by Emma Rumney. Editing by Mrigank Dhaniwala and Mark Potter)