HEINEKEN reported worse-than-expected beer volumes due to declines in the Americas and Asia-Pacific as consumers failed to ramp up spending.
The Dutch brewer said on Wednesday (Oct 23) that volumes rose 0.7 per cent in the third quarter, missing estimates compiled by Bloomberg of 2.02 per cent.
Heineken has been struggling with the US market, where depressed consumer spending has hit sales. Still, the company maintained its full-year operating profit guidance of between 4 per cent and 8 per cent.
Poor summer weather in Europe kept brewers from taking full advantage of sporting events which traditionally draw customers into bars and pubs, leading Heineken to miss estimates on volume growth.
The company, which makes more than 300 brands including Amstel, Red Stripe and Sol, has stepped up investments in marketing in key territories and pushed sales of zero-alcohol beer Heineken 0.0, which grew 3.4 per cent in the quarter, led by sales in Brazil, the US and Vietnam.
Like other consumer firms, Heineken’s sales have been hit by currency devaluation in markets such as Nigeria. But the company has said it remains committed to the African country, where volumes are growing, even as rival Diageo is selling its stake in Guinness Nigeria.
In the Americas, growth in Brazil came as the brewer was hit by declines in Mexico and the US, where a volume drop of 1.3 per cent was partly offset by pricing.
Asia-Pacific saw a beer market decline in Cambodia, fuelled by local competition and promotions. India and Indonesia posted stronger sales for the quarter.
“The company can deliver superior and profitable growth alongside improving capital efficiency,” Jefferies analysts wrote in a note on Wednesday, adding they expect the shares to react positively on investor confidence on the results delivered and the reiterated guidance. BLOOMBERG
