Shares in Anheuser-Busch InBev (ABI) bubbled up 7% to €67.5 after the brewing behemoth served up forecast-busting Q1 results.
Revenues were boosted by a 37% jump in non-beer sales.
| Share price: €67.5 (+6.8%) | PE FY26: 17x |
| Market cap: €123bn | Yield FY26: 1.9% |
The Budweiser-to-Michelob Ultra maker’s first volume growth in three years suggests a rebound could be underway in the challenged beer industry.
Brewing behemoth
AB InBev is the world’s biggest brewer whose strong brands include Stella Artois, Corona, Carling Black Label and Brahma. The Brussels-headquartered drinks giant outperformed market expectations in every region during Q1.
The company reported a forecast-beating 5.3% rise in operating profit to over $5.4 billion for the first three months of the year. Consumers have been cutting back on beer in recent years due to cost-of-living pressures and shifting drinking habits.
Yet rather than the decline analysts expected, AB InBev’s volumes rose 0.8% in Q1. That halted a prolonged period of sliding volumes dating back to 2023.
Latin America shines
AB InBev’s top global brands, including Corona and Stella Artois, helped drive its performance, as did non-alcoholic beer and non-beer labels such as the canned cocktail brand Cutwater.
Q1 beer volumes grew 1.2%, driven by record sales in Latin American markets including Mexico, Colombia, Brazil, South Africa and Peru.
In the US, AB InBev ‘continued to outperform the industry’, but the Belgian brewer continued to lag peers in China, where it has struggled to sell more expensive brands.
Cheers to beer
‘Cheers to beer’, said CEO Michel Doukeris. ‘The strength of the category and the consistent execution of our consumer-centric strategy drove continued momentum across our footprint. We are investing behind our megabrands and innovations to lead and grow the category. With strong execution by our teams and major moments of celebration ahead, we are well positioned for 2026.’
AB InBev kept its FY26 guidance unchanged. EBITDA is expected to grow in line with the company’s medium-term outlook of between 4% to 8%.
While AB InBev did not directly mention the Middle East conflict, this outlook factors in management’s ‘current assessment of inflation and other macroeconomic conditions’.
AB InBev’s shares have rallied 25% year-to-date with the company perceived to be a winner from this summer’s FIFA World Cup.
Today’s Q1 results suggest demand for its beers is steadier than expected. The beat was helped by strong brands such as Corona and Michelob Ultra and more consumers trading up to pricier labels such as Stella Artois.
Nevertheless, investors should weigh up a number of risk factors before buying in here. Drinking habits continue to evolve, with many younger consumers shunning alcohol entirely.
Furthermore, AB InBev faces a number of margin-squeezing ripple effects from the Middle East. These include higher costs for fertiliser, glass bottles and aluminium cans.
Read the press release here: https://www.ab-inbev.com/investors/results-center
You might also like these stories:
