Anheuser-Busch InBev, the global beer-making giant, reported a sharp drop in U.S. sales and profit on Thursday as it counted the cost of a conservative-led boycott of Bud Light following the company’s collaboration with a transgender influencer.
Anheuser-Busch said its U.S. revenue fell more than 10 percent last quarter, compared to the same period last year, “primarily due to the volume decline of Bud Light.” Operating profit in the American unit fell by almost 30 percent.
Bud Light has faced backlash from conservative commentators and celebrities after Dylan Mulvaney, a transgender influencer, posted a campaign for the beer on Instagram in April. Anheuser-Busch later put some marketing executives on leave and announced layoffs at corporate offices.
“People want to enjoy their beer without debate,” Michel Doukeris, CEO of Anheuser-Busch, told analysts on Thursday. He said the company would focus on promoting its beers through its partnerships with sports leagues and nonprofits that support military families and farmers.
Bud Light was dethroned by Modelo Especial as the nation’s best-selling beer at retail in June. Constellation Brands, which sells Modelo in the US, reported 7.5 percent growth in beer volume in its latest quarter, which ended May 31, compared with the same period last year. Overall volume at Anheuser-Busch, which also sells Beck’s, Michelob, Stella Artois and many other brands, fell more than 1 percent in the three months to June.
Bud Light has lost market share due to the setback. However, Anheuser-Busch noted that the share of sales of its brands in the United States had stabilized by the end of the quarter.
Sales of the conglomerate’s other beers in other countries helped bolster its results, with total revenue last quarter up just over 7 percent and a target profit up 5 percent, beating analysts’ expectations. The Belgium-based company reiterated its forecast for earnings growth of up to 8 percent this year, partly because it has raised prices. Its share price rose more than 4 percent in early European trade before moderating to a smaller gain later in the day.
Sticking to its profit forecast “should provide relief to investors who have been waiting on the sidelines to see if the Bud Light situation would create a reset of expectations,” analysts at Morgan Stanley wrote in a research report. They warned that “the full hit” of Bud Light’s problems would show in the company’s next quarterly report.
Retail sales of Bud Light fell as much as 42 percent in some U.S. metropolitan areas in the four-week period ending July 22, according to Nielsen IQ data analyzed by consulting firm Bump Williams. Customers at bars and restaurants have also been ordering Bud Light less often, sending sales down 34 percent last quarter, according to data from Union, an ordering system used at more than 1,000 bars and restaurants in 34 states.
Bud Light has lost its top spot at those establishments, falling to fourth place behind Miller Lite, Michelob Ultra and Coors Light, according to the Union.
Molson Coors, owner of Coors Light and Miller Lite, on Tuesday reported record quarterly sales and a big jump in profits. The company’s CEO, Gavin Hattersley, told analysts that in the second quarter of last year, Bud Light sold more than Coors Light and Miller Lite combined. In the second quarter of this year, he said, Coors and Miller achieved 50 percent more sales than Bud Light.