Anheuser-Busch InBev said Tuesday that revenue growth in most of its global regions was offset by a drop in North American sales in the third quarter, in a sign of continuing fallout from a promotion with a transgender influencer.
The world’s largest brewer and parent company of Bud Light said its revenue climbed 5% to $15.6 billion for the July-September period. That was in line with Wall Street’s estimates, according to analysts polled by FactSet. But revenue in the United States tumbled 13.5%.
Bud Light sales plunged in early April amid a conservative backlash after the brand sent a commemorative can to transgender influencer Dylan Mulvaney. Bud Light also angered supporters of transgender rights who felt it abandoned Mulvaney.
U.S. retail dollar sales of Bud Light were down 29% in the four weeks ending Oct. 21 compared to same period a year ago, according to Nielsen data compiled by Bump Williams Consulting. They are down nearly 19% for the year to date.
AB InBev CEO Michel Doukeris said the company is focusing its U.S. marketing on more traditional outlets, like college football and concerts. Earlier in October, the company announced a multiyear partnership that will make Bud Light the official beer of the UFC mixed martial arts organization. Bud Light was one of the UFC’s original sponsors 15 years ago.
Doukeris said those efforts are bearing fruit. AB InBev’s total share of the U.S. market — including brands like Michelob Ultra and Busch Light — fell to just over 36% in late April but has remained there ever since, he said. Doukeris said recent internal polling shows that 40% of lapsed Bud Light drinkers say they would consider returning to the brand.
“This gives us some certainty that we are moving in the right direction,” Doukeris said Tuesday in a conference call with investors. “I don’t think we are at a new normal yet, but we have a good grip on what we need to do and how we are proceeding.”
In a sign of its confidence, AB InBev announced a $1 billion share buyback program Tuesday, which will be executed over the next year. InBev’s shares on the Nasdaq stock exchange rose nearly 5% in morning trading.
Still, efforts to win back customers are taking a toll on profits, with U.S. pretax earnings down 29% in the third quarter. Doukeris said about two-thirds of that decline was due to lower sales and one-third was due to increased spending on marketing and payments to support wholesalers.
Globally, AB InBev said its volumes fell 3.4% in the quarter, hurt by a wet, chilly summer in northern Europe. The company said sales volumes were up in South America, Asia and Africa.
InBev’s net income rose 4% to $5.4 billion, or 86 cents per share. That was ahead of the 84 cents Wall Street expected, according to FactSet.