By Tom Fairless
BRUSSELS-- Anheuser Busch InBev NV Thursday said its net profit
fell in the second quarter, missing analysts' expectations as
weakness in the U.S., Europe and Brazil weighed on sales.
AB InBev, the world's largest brewer, said net profit fell to
$1.9 billion in the three months to end-June from $2.8 billion in
the corresponding period a year earlier.
Revenues for the maker of Budweiser, Corona and Stella Artois
fell sharply to $11.1 from $12.2 billion a year ago. The brewer
attributed the decline to poor weather and weak economic conditions
in a number of key markets, as well as a tough comparison with a
year-earlier period that included the soccer World Cup in
Brazil.
The brewer also booked a loss of $139 million on derivatives
used to hedge the price of shares it hands out as compensation to
employees.
AB InBev's shares fell 4.5% in early trading on the Brussels
stock exchange.
"All in all the [result] was below the market's estimates on
volumes, top line, the operating result and the bottom line,
admittedly on difficult" comparisons with the year-earlier period,
wrote Hans D'Haese, an analyst at Bank Degroof, in a note to
clients.
The brewer's performance in the U.S., which accounted for around
a third of total revenue last year, continues to weigh on
profit.
Several of its flagship brands, including Budweiser and Bud
Light, are still losing market share in the country. The brewer has
been struggling for years to adjust to changing tastes as U.S.
consumers increasingly favor craft beers over AB InBev's
mass-market lagers.
"In the U.S., the high-end segment is growing faster than the
overall" beer market, Felipe Dutra, AB InBev's chief financial
officer, told reporters on a conference call. He said the brewer
has around 16% of the premium U.S. beer market, which is
"materially lower" than its roughly 48% share of the wider U.S.
market.
While advertising campaigns have helped to slow the decline of
Budweiser's market share, Mr. Dutra said there was "still a long
way to go."
"We are not there yet, it's a multiyear effort," he said.
Sales in Brazil fell by around 8% due to "an unfavorable
macroeconomic environment" and a comparison with a year-earlier
period during which the country hosted the soccer World Cup
tournament. The World Cup effect accounted for around 5.5
percentage points of the decline, the company said.
In China, sales were "essentially flat" despite poor weather and
"economic headwinds," the brewer said.
A bright spot was Mexico, where sales rose around 4%, and beer
volumes also grew in Argentina and Canada
Write to Tom Fairless at tom.fairless@wsj.com
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