AB InBev Expects Earnings Growth From World Cup Presence
Anheuser-Busch InBev is "ramping up spending on marketing initiatives" ahead of the World Cup this summer after promotions "helped buoy demand in Colombia and Peru," according to Buckley & Mulier of BLOOMBERG. Budweiser's campaign for the World Cup began this week. The initiative comes as AB InBev, the world’s largest brewer, "works to drive more revenue from athletic tournaments and social occasions after the past decade's influx of smaller brands weaned drinkers off its mass-market brews." The company expects a "drag on earnings growth of between 0.5 and 1 percentage point from increased spending on the World Cup," which will be more weighted to the second quarter of the year, CEO Carlos Brito said on Wednesday. The company said that it is "confident" growth "will quicken, especially in the second half." Olivier Nicolai, an analyst with Morgan Stanley "who rates the shares the equivalent of buy," said in a note to clients that the beverage company's first-quarter earnings growth of 6.6% was "a relief, and growth looks set to accelerate." In Colombia, the Aguila brand increased sales more than 50% in the first quarter, "helped by ads that fueled nostalgia for the last time the country played in the World Cup" (BLOOMBERG, 5/9).