AB InBev Q2 Earnings Beat Estimates, Revenues Miss on Soft Volumes

Anheuser-Busch InBev SA/NV BUD, aka AB InBev, reported second-quarter 2025 results. The company’s earnings per share (EPS) beat the Zacks Consensus Estimate and improved year over year. However, the top line declined and missed the Zacks Consensus Estimate. Bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.

AB InBev reported an underlying EPS (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs and the impacts of hyperinflation) of 98 cents, up 8.7% year over year. The rise was driven by 10.2% EBIT growth and the continued optimization of net finance costs. The bottom line beat the Zacks Consensus Estimate of 94 cents. On a constant-currency basis, underlying EPS improved 17.4%.

Revenues of $15 billion missed the Zacks Consensus Estimate of $15.33 billion and declined 2.1% year over year. The company reported organic revenue growth of 3%, driven by revenue increases in 70% of its markets. Growth across markets was driven by a focus on ongoing premiumization and disciplined revenue management, contributing to higher revenue per hectoliter (hl).

Shares of this Zacks Rank #3 (Hold) company have lost 12.6% in the past three months compared with the industry’s 5.9% decline.

BUD’s Q2 Details

Revenue per hl improved 4.9% year over year in the quarter, backed by revenue-management initiatives. The total organic volume fell 1.9%, including a decline of 2.2% in the own-beer volume, offset by a 0.3% rise in the non-beer volume. The volume decline was led by soft industries, and performance in China and Brazil. Excluding these countries, momentum was strong, with volume rising 0.7%. 

Revenues reflected the strong performance of its premium and super premium beer brands. The company’s revenues for the megabrands increased 5.6% year over year. Within its megabrands, Corona led the performance with a 7.7% revenue increase outside of Mexico, including double-digit volume growth in more than 30 markets. The company’s above-core beer portfolio delivered year-over-year revenue growth of 5.1%.

AB InBev has been keen on making investments in its portfolio over the years, and rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 71% to its revenues in second-quarter 2025. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $335 million in revenues in second-quarter 2025.

BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio recorded a 6.4% revenue rise, driven by double-digit growth in key brands such as Cutwater and Nütrl in the United States, and Beats in Brazil.

Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise

 

Anheuser-Busch InBev SA/NV price-consensus-eps-surprise-chart | Anheuser-Busch InBev SA/NV Quote

The cost of sales dipped 3.1% on a reported basis to $6.6 billion and was down 1.7% on an organic basis. SG&A expenses declined 3.9% year over year on a reported basis and remained flat on an organic basis to $4.6 billion.

Our model had predicted the cost of sales to decline 2.2%, with a 120-basis-point (bps) decline in the cost of sales rate to 42.9%. We estimated a 30-bps year-over-year increase in the SG&A expense rate to 31.7%. In dollar terms, SG&A expenses were expected to rise 1.8% year over year.

The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5.3 billion, which was almost flat year over year on a reported basis and improved 6.5% on an organic basis. The normalized EBITDA margin expanded 70 bps year over year on a reported basis and 116 bps organically to 35.3%. The organic EBITDA margin benefited from cost efficiencies and disciplined overhead management.

We anticipated normalized EBITDA to rise 4.2% year over year to $5.5 billion. Meanwhile, the normalized EBITDA margin was expected to expand 120 bps to 35.8%.

BUD’s 2025 Outlook

For 2025, AB InBev expects year-over-year EBITDA growth of 4-8%, in line with its medium-term outlook. The company expects net pension interest expenses and accretion expenses of $190-$220 million per quarter in 2025, based on currency and interest rate fluctuations. It anticipates an average gross debt coupon of 4% in 2025.

Management expects a normalized effective tax rate of 26-28% for 2024. Net capital expenditure is projected to be $3.5-$4 billion.

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The Zacks Consensus Estimate for Carlsberg’s current financial-year sales and EPS indicates growth of 31.8% and 11.3%, respectively, from the prior-year reported levels.

Zevia ZVIA focused on addressing health challenges resulting from excess sugar consumption by offering a portfolio of zero-sugar, zero-calorie, naturally sweetened beverages. It currently has a Zacks Rank of 2.

The Zacks Consensus Estimate for Zevia’s current financial-year sales and EPS indicates growth of 3.4% and 48.4%, respectively, from the prior-year reported levels. ZVIA has a trailing four-quarter earnings surprise of 33.6%, on average.

PepsiCo Inc. PEP is one of the leading global food and beverage companies. The company currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for PepsiCo’s current financial-year sales indicates growth of 1.2% from the year-ago reported figures. PEP delivered a trailing four-quarter earnings surprise of 1.01%, on average.

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