Anheuser-Busch InBev (NYSE:BUD) shares moved higher on Thursday despite the Bud Light brewer reporting a drop in its second quarter profits after some consumers recoiled over its decision to partner with transgender influencer Dylan Mulvaney in a marketing campaign.
The company's attributable profit fell 79% from US$1.6 billion to US$339 million year on year, as sales to retailers declined by 14% on the back of the lower demand, AB InBev reported.
Lower demand for the light beer was a key reason for a sharp fall in profit, according to the company, with Bud Light volumes particularly declining.
AB InBev had partnered with Dylan Mulvaney, a social media influencer, on a marketing campaign in April, which saw her celebrate one year since transitioning with a can of Bud Light in a video posted on Instagram and TikTok.
However, right-wing customers and celebrities reeled at the partnership, with many boycotting the brand arguing AB InBev was trying to be “woke.”
“The revenue decline of Bud Light in the US” partially offset strong growth of AB InBev’s brands across other global markets, including South America and Africa, the company said.
Its performance in China was particularly strong, with AB InBev selling 11% more beer by volume and over 20% more higher-priced "premium" beers, which saw its revenue and profit in the country exceed pre-pandemic levels.
Total revenue increased by 7.2% during the quarter, the company added, though sales volumes declined by 1.4% on the back of the Bud Light boycott.
Revenue of $15.12 billion fell below the Wall Street estimate of $15.35 billion, but the brewer's profit topped expectations with earnings per share of $0.72 above the forecast of $0.68.
Killik & Co analysts highlighted the positives in AB InBev’s statement, pointing to the company’s unchanged outlook and other disappointing results from peers.
“We continue to like AB InBev as the world’s largest beer company, in a category that we expect to have enduring demand over the long term,” the investment firm said.
AB InBev shares had added 1.2% at US$56.89 shortly after noon in New York on Thursday.