AB InBev's World Cup Quarter Tests Whether Its Volume Revival Can Finally Lift Margins

Anheuser-Busch InBev heads into its third-quarter report with the easiest comparison it is likely to see for some time and the biggest marketing event on its calendar already in the books. A year ago, this quarter was a low point: revenue grew less than 1%, Brazil and Mexico were hit by poor weather, China revenue fell by double digits and underlying EPS barely moved. Since then, management has described a clear turn, with beer volumes back in growth and earnings accelerating. The question now is whether a World Cup summer in North America turns that recovery into something more durable, including the margin expansion that was missing last quarter.

Wall Street expects EPS of $1.14 on revenue of about $16.24 billion, which would mark roughly 15% earnings growth and 7.3% revenue growth from the year-ago $0.99 and $15.13 billion. That is a healthy step up for a global brewer, though somewhat cooler than the 20.8% underlying EPS growth posted last quarter, when translational currency gains gave earnings a lift. Management reaffirmed its 2026 target of 4% to 8% organic EBITDA growth rather than raising it, and last quarter's 5.3% EBITDA gain sat squarely in the middle. A revenue outcome near 7% would suggest the company is tracking toward the upper half of that framework, provided costs cooperate.

Costs are the crux. Margins were roughly flat last quarter as transactional currency headwinds in Mexico and Brazil offset pricing and mix, a notable slowdown from the triple-digit basis-point expansion achieved in fiscal 2025. Management indicated those currency pressures were concentrated in the first half, so the third quarter is the natural place to see margins resume widening. If they do not, attention will shift to the other cost issues flagged on the call, namely elevated US aluminum costs tied to the Midwest premium and rising energy prices, which management warned could squeeze consumers with a lag of three to six months. That lag points directly at this quarter and the next.

On the demand side, the evidence needed to validate the story is fairly specific. Management sized the World Cup at a 20 to 30 basis-point uplift to global volumes, so a meaningful volume improvement over last quarter's 1.2% would show the event delivered. The fast-growing pockets also need to hold their pace: US Beyond Beer revenue growth accelerated to the high 60s percent with Cutwater and the newly integrated Beatbox, nonalcoholic beer grew 27%, and 75% of markets gained or held share. China remains the swing factor. Volumes there were down only modestly last quarter, a big improvement, but the business still lagged a slightly growing industry, and a return toward stabilization would remove one of the longest-running drags on the narrative.

The market has not rushed to pay for the turnaround. Shares slipped 0.7% since the last report while the S&P 500 gained 4.5%, leaving the stock about five points behind. Sentiment is modestly bullish and essentially unchanged from last quarter, which suggests expectations have not been inflated. At about $83, the stock trades comfortably above its 200-day moving average near $77 and in the upper portion of a post-earnings range spanning roughly $72 to $87, a wider swing than the prior quarter's.

Ultimately, this report hinges on conversion. AB InBev has already shown that volumes and revenue can grow again; it now needs to show that the World Cup lift, premium mix and Beyond Beer momentum can translate into expanding margins as first-half currency pressure fades. Rising volumes paired with renewed margin expansion would support the improving narrative and keep the upper end of EBITDA guidance in play. Flat margins blamed on energy or packaging costs would suggest the recovery remains more top-line than bottom-line.

This earnings preview was originally published on Earnings Whispers.

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