Anheuser-Busch InBev today reported its third-quarter earnings, highlighting global revenue growth of 3.6 percent for the three-month period ending September 30.
Despite the increased earnings, A-B InBev’s worldwide beer volumes fell by 1.5 percent while U.S. shipments to wholesalers dropped a whopping 6.4 percent during the quarter.
During a call with investors and analysts, A-B InBev CEO Carlos Brito blamed the most recent volume declines on disruptions caused by hurricanes Harvey and Irma, which he also said triggered 2 percent EBITDA reduction during the quarter, but neglected to mention that the company has ceded more than 14 million barrels of beer in the U.S. since 2008.
“There was a mismatch between STWs and STRs, in that our STRs were down in the quarter by 3.4 percent, but our STWs were down by 6.4 percent,” he told a caller. “The reason for that was the hurricanes we had in Texas and Florida that disrupted the shipments in the southern part of the country, and those are two big markets for us.”
As a result of the third quarter losses, the company’s U.S. market share dipped 0.8 percent.
According to multiple reports, Trevor Stirling, an analyst at Sanford C. Bernstein, called A-B’s underlying U.S. business “incredibly weak,” while noting revenue declines of 5.3 percent.
“We can’t remember a quarter as bad,” he wrote in a note to investors.
A-B’s largest brand, Bud Light, which Brito said accounts for about 19 percent of total U.S. beer sales, also lost nearly one full point of market share during the three-month period as consumers continued to shift to more flavorful beer options as well as wine and spirits.
To help offset those losses, the company is hoping above premium brands like Michelob Ultra — which grew double digits and was the top share gainer in the U.S. for the tenth consecutive quarter — as well as offerings from its 10 U.S. craft brewery purchases will fuel future growth.
“As consumers in the U.S. continue to trade up to above premium brands, we believe we are well positioned with our craft portfolio, which is outperforming the segment,” Brito said during the call.
Even as the company worked to curb volume losses, gross profits grew 7.1 percent, to $9.1 billion, during the quarter. A-B InBev’s gross profit has grown 5.4 percent through the first nine months of the year, to more than $25.6 billion.
When asked about continued gross margin expansion as well as how cuts made earlier this year to the company’s “High End” division in the U.S. contributed to SG&A savings, Brito explained that the A-B was using some of those funds on “things like packaging or messaging or experiential or support of new upcoming brands.”
“There is a big effort in finding those monies, so we can put it to better use,” he said.
A-B InBev also said it captured $336 million in synergies during the third quarter, following the $100 billion-plus merger with SABMiller. To date, the company has realized more than $1.75 billion in synergies.
View the company’s third-quarter results.