Brewing giant AB InBev has lifted its yearly earnings guidance after posting higher than anticipated earnings, with punters’ thirst for beer not waning despite high inflation levels.
Raising a glass to its best quarterly performance this year, on a volume basis, the Budweiser maker elevated its 2022 guidance.
EBITDA is now anticipated to rise between six and eight per cent, an increase from a previous range of four to eight per cent.
AB InBev chief executive officer Michel Doukeris, pointed to “strong consumer demand” for the company’s drinks portfolio and dubbed the beer category “resilient.”
The world’s largest brewer posted a 3.7 per cent increase to sales volumes, in a trading update for the July to September quarter.
It comes as consumers are pulling back on discretionary spending amid staggering increases to household bills across the board.
AB InBev’s double-digit growth in Europe was offset by elevated cost pressures, the Corona maker said.
It cited headwinds from elevated commodity prices and marketing investments surrounding the FIFA World Cup and its premium drinks.
Just yesterday, rival brewing behemoth Heienken cautioned that it had seen “some signs of softness in consumer demand”, amid a cost of living crunch.
The Dutch brewer, which makes Amstel and Birra Moretti, said its revealed beer volumes had increased by 8.9 per cent on a like-for-like basis in the third quarter.
Heineken chief executive Dolf van den Brink said the company “increasingly see reasons to be cautious on the macroeconomic outlook.”
“Runaway inflation has forced many people to revise how they spend their money, and there is some evidence to suggest that inflation has hit beer sales, with some people downtrading to cheaper brands,” Myron Jobson, senior personal finance analyst at interactive investor, said.
However, AB InBev’s performance suggests that ” while people are spending less things like household furniture, they are at least willing to have their preferred beer at the end of the day,” he added.
Even so, the World Cup at the end of the next month may act as a “light at the end of the tunnel” for ailing brewers, Jobson said.