Shares of Anheuser Bush InBev (BUD) beat the market early Wednesday as the stock rose 4% while the S&P 500 was flat. That result erased a portion of the alcoholic-beverage giant's recent losses, yet shares are still in negative territory for the year. InBev stock is down 3% year to date, compared to a 9% rally in the wider market.
Wednesday's rally was sparked by good news in the company's Q2 earnings update, which was released before the opening bell.
Rising sales
InBev reported mixed results across its business that ultimately translated into weaker global sales. Revenue rose 3% as price increases offset a 1% drop in worldwide volumes.
The company is still facing soft beer demand in the U.S. market due to a contracting industry. The good news is that InBev is gaining market share despite those challenges and is boosting profitability, as well, thanks to price increases and cost cuts. "We are encouraged by our results to start the year," CEO Michel Doukeris said in a press release .
InBev notched some key wins in its growth brands, led by Corona's 16% sales spike. On the other hand, Bud Light sales continued to contract in the U.S. market.
That franchise has been hurt by a demand shift toward higher priced, imported beverages. InBev's global portfolio means the business isn't overly reliant on that single market, though.
Looking ahead
Investors can look for rising profit margins throughout the rest of the year, which will likely power improving earnings trends in 2024 and beyond. As for growth, InBev is focused on several promising initiatives, including supporting popular brands like Corona and Stella Artois while pushing into more non-beer beverages.
It may take time for these efforts to speed sales growth, as most Wall Street pros see revenue rising by just 5% in 2025. Still, continued steady progress should support more positive shareholder returns from the alcoholic-beverage giant.
