- Beer brewer AB InBev reports better-than-expected profit growth, citing signs of a turnaround in recession-racked Brazil, its second-biggest market.
- The maker of Budweiser says it will bring back its "America" media campaign and packaging for Memorial Day and Labor Day.
The world's largest brewer, Anheuser-Busch InBev, reported better-than-expected profit growth on Thursday, citing signs of a turnaround in recession-racked Brazil, its second-biggest market, which has struggled to grow alcoholic beverage sales.
Its U.S. share prices closed up more than 5 percent on Thursday.
Beer volumes picked up in Brazil from January to March, according to the brewer, which operates such brands as Budweiser, Stella Artois and Corona.
"We remain cautiously optimistic on Brazil overall," Chief Financial Officer Felipe Dutra said on the earnings conference call. "We expect 2017 to be better industry-wise than 2016."
AB InBev said overall first-quarter core profit rose 5.8 percent on a like-for-like basis, excluding currency fluctuations and the impact of a merger last year with SABMiller. This is above the 3.3 percent that was predicted in a company-compiled poll.
AB InBev also reported further cost savings of $252 million during the period, following its $100 billion acquisition with SABMiller.
For the first quarter, in the U.S. AB InBev reported lower sales volumes as Bud Light and Budweiser lost market share, but profit margins increased due to heightened consumption of higher-priced Michelob Ultra, Stella Artois and craft beers, the company said.
Volumes and earnings increased in Mexico, which was coupled with better news of growing margins in South Africa — one of AB InBev's new markets — higher earnings in Europe, and a strong start to 2017 in China.
"We think a variety of factors ... imply further revenue acceleration and increasing rates of margin expansion as the year progresses," Stifel Nicolaus analyst Mark Swartzberg wrote in a note to clients Thursday. Some of these factors include U.S. beer trends heading into peak summer season, large new markets for accelerating global brands and macro trends in Brazil, Swartzberg said.
Looking ahead to summer, AB InBev CEO Carols Brito told analysts and investors on Thursday's earnings call that the company will bring back its "America" media campaign and packaging for Memorial Day and Labor Day, "building on the success of last year."
With Thursday's gains, shares of AB InBev are up 13 percent this year but are down nearly 3 percent over the past 12 months.
—Reuters contributed to this report.