Bud Light Sales Continue to Plague AB InBev, so $1 Billion Stock Buyback Planned
While the big brewer is doing fine globally, Anheuser-Busch InBev continues to suffer in the U.S., apparently the motivation behind a billion-dollar stock buyback program aimed to appease shareholders who have seen their stock decline by nearly 50% since July of 2019.
The company reported its third-quarter financials on Oct. 31, which showed growth in every geographic region except one. Mexico up. Colombia up double-digits in both the top- and bottom-lines. China, South Africa, Brazil all growing nicely; Europe up “only” low-single digits.
But in the U.S., “Revenue declined by 13.5% impacted by volume performance,” and “primarily due to the volume decline of Bud Light.” Most observers attribute that to the blowback after Bud Light’s support of a “transgender influencer” this past spring, which prompted boycotts from conservative beer drinkers.
In a story common throughout the food & beverage industry, while overall global revenue increased by 5.0% in the third quarter of 2023 (to $15.574 billion) and by 8.3% in the first nine months of this year (to $44.907 billion) volume declined 3.4%. Price increases offset those volume declines. Underlying profit was $1.735 billion in the third quarter and $4.497 billion over nine months, both figures up about 3%.
The same day that the third-quarter financials were released, the company announced a $3 billion cash tender to purchase outstanding bonds and the $1 billion share buyback program, which will be executed some time in the next 12 months. “Our current intention is to hold the shares acquired as treasury shares to fulfil future share delivery commitments under the stock ownership plans,” the company said.
Upon news of the stock repurchase, the price jumped $3 to nearly $57.
