Ambev, the leading beverage company in Latin America, reported its third-quarter earnings on Thursday, revealing a mixed bag of results. While the company missed analyst estimates on quarterly sales, strong growth in Brazil helped offset declines in other regions.
Ambev’s earnings per share came in at 4 cents, aligning with Wall Street expectations. However, the company’s quarterly revenue of $3.983 billion fell short of the anticipated $4.082 billion.
Despite a slight 0.6% decline in consolidated volumes, Ambev saw positive growth in its key market, Brazil. The company recorded a 1.3% volume increase in the country, driven by strong performance in both beer and non-alcoholic beverages (NAB).
In Brazil’s beer segment, premium and super premium brands like Corona, Spaten, and Original witnessed robust volume growth in the low twenties. Core plus brands, led by the Budweiser family, also saw growth in the low teens. Meanwhile, core brands Brahma and Antarctica recorded high single-digit volume increases.
Outside Brazil, Ambev faced headwinds. Central America and the Caribbean (CAC) saw a 0.5% decline in volumes, though the Dominican Republic experienced mid-single-digit growth.
Latin America South (LAS) saw a more substantial decline of 7.7% due to challenging market conditions in Argentina. Canada also experienced a 1.4% volume drop.
While Ambev’s cash cost of goods sold (COGS) increased in low single digits due to inflation and reduced benefits from commodity price hedges, its cash selling, general, and administrative expenses (SG&A) rose in mid-single digits due to increased brand support investments and higher administrative costs.
Despite the challenges, Ambev remains optimistic. “Looking ahead, we remain focused on executing our commercial strategy and are confident in our preparedness for the Summer season in South America, with healthier brands and sustained all-time-high NPS levels,” the company stated.
Ambev’s stock price took a hit following the earnings announcement, falling by 3.08% to $2.20 at the close of trading on Thursday.
The company’s performance highlights the complex dynamics of the beverage industry, with growth in key markets like Brazil being offset by challenges in other regions. Ambev’s focus on premiumization and marketing investments will be crucial in navigating these challenges and driving future growth.
