Hurt by weakness in beer sales in China and the US, brewing giant Anheuser Busch InBev (NYSE:BUD) aka AB InBev reported third-quarter revenues and earnings that missed Wall Street expectations. BUD shares tanked 8.5% during pre-market hours on Friday.
BUD shares have increased 38% in the year-to-date period.
The Belgian firm reported a modest 2.7% growth in revenues to $13.17 billion, which fell short of the street consensus of $13.82 billion. Adjusted net income of $1.22 per share was, meanwhile, 9 cents short of the analysts’ target.
There has been a change in consumer preferences towards healthier drinks, primarily in the US, hurting sales of soda and beer. The world’s largest brewer was forced to buy up numerous craft brewers over the past few years to maintain its market position in the beer industry.
The downbeat results and possibility of prolonged weakness has forced the company to step down its expectation for the full year. The parent of Budweiser and Corona beer now sees “moderate” EBITDA growth in FY19, compared to earlier projection of “strong” growth.
“Price increases implemented in South Korea and Brazil drove volume declines, which were exacerbated by softer consumer demand in light of difficult macroeconomic conditions,” the company said in a statement.
Earlier this month, rival firm Constellation Brands (NYSE: STZ) reported mixed quarterly results. The stock, however, fell as the company incurred a bigger loss from investments in cannabis firm Canopy Growth Corporation (GCG).