Bud Light sales keep slipping in another ‘very weak’ week

Shares of Bud Light parent company Anheuser-Busch InBev (BUD) are down more than 17% since the company reported earnings May 4, as the Dylan Mulvaney controversy continues to weigh on the beer giant’s sales.

The company, though, saw some slight improvement. In the week ended May 27, Anheuser-Busch InBev said Bud Light sales dropped 23.9% from a year ago—a smaller decline than the week prior, down 25.7%. Volumes were slightly improved slightly better too, down 27.8% the week of May 27, compared to down 29.5% the week of May 20. That’s according to data from Bump Williams Consulting cited in a Evercore ISI note to clients.

“Another week of very weak trends for Bud Light indicates that tracked channels may be reaching a point of stabilization, albeit at significantly lower levels for Anheuser-Busch InBev than prior to the controversy,” Evercore said.

This is now month two of the boycott after Mulvaney, a transgender influencer and TikTok personality, made an Instagram post during March Madness basketball endorsing the beer. Following the post, the company saw sales lower throughout April and into May, following an April 3 video from country singer Kid Rock, which apparently prompted a wider-spread boycott among certain US consumers.

Anheuser-Busch InBev’s other brands in the portfolio are seeing a rebound too, but “remains well below pre-controversy levels as the boycotts on ABI’s greater portfolio continue to impact brands outside of Bud Light.”

Sales of Budweiser were down 8.5% year-over-year the week of May 27, but better than the previous week of May 20 ,which saw the biggest drop, down 11.2%. Michelob Ultra sales dropped 0.1% the last week of May, compared to down 3.8% the week before. Busch Light sales declined 3.0% the last week of May versus a 5.2% drop the week prior. Natural Light also saw improvement, sales dropped 1.5% the week of May 27, compared to a 4.9% decline the week of May 20.

Story continues

Volumes for all brands across the portfolio improved too. Michelob Ultra volumes showed the greatest improvement, down 3.6% compared to down 7.5% in the week prior as the summer season kicks off.

Evercore’s Robert Ottenstein said “Notably, industry volumes improved to -2.4% vs. -4.0% in the latest week, indicating ABI’s acceleration was likely not due to easing of boycott driven pressures.”

Following the earnings call with investors, where Anheuser-Busch InBev CEO Michel Dimitrios Doukeris downplayed the controversy, the company was met with boycotts from others, including from the LGBTIQA+ community like 2Bears Tavern Uptown in Chicago.

For example: In an Instagram post, the bar venue said “Anheuser-Busch’s decision to drop its support of Mulvaney in response to ignorant and hateful objections by some of its customers shows how little Anheuser-Busch cares about the LGBTIQA+ community…”

Ottenstein said if this weakness continues, it “begs the question of whether Anheuser-Busch InBev and/or its distributors will have to make structural changes to reduce their cost basis if trends don’t improve over the next few months.”

Per a note from Jefferies to clients, roughly 65% of distributors expect impact from the Bud Light controversy to last longer than 6 months, including a third of respondents that expect a permanent impact.

Molson Coors benefits, Bank of America upgrades shares to Neutral from Underperform

Meanwhile, competitor Molson Coors continues to gain share. All of its brands cited in the report from Evercore ISI (Coors Light, Miller Lite, Keystone Light and Miller High Life) saw the best sales week in the last week of May since controversy began during the week of April 8. Coors Light led the sales growth with sales up 26.3% compared to a year prior.

On Tuesday, Bank of America upgraded shares of Molson Coors to Neutral from Underperform. The firm said “Our rating change is based on our view that recent U.S. market share gains related to the Bud Light boycott have lasted long enough to positively impact sales and earnings,” among other reasons.

Shares of Molson Coors (TAP) are up more than 5% since it reported its latest earnings results on May 2.

—

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube