Economic slowdowns around the world hasn't yet led to beer sales going flat for mega-brewer AB-InBev.
"I think that demand is holding," AB-InBev CEO Michel Doukeris said on Yahoo Finance Live (video above). "Beer as a category is very resilient."
AB-InBev produces everything from good old affordable Bud Light to more premium priced non-beers such as CutWater.
Doukeris says not only haven't beer sales waned this year, consumers don't appear to be trading down to cheaper alternatives.
"Not yet — globally, we don't see this," Doukeris said when asked about consumers trading down overall. "Premiumization as a trend continues to grow and is doing well. You think about our global brands, more premium brands, this quarter they grew very well, led by Corona, that grew revenues 23.5%, while we grew revenues 12%, a little bit above that in the quarter. So more premium beers continue to move. It's almost unstoppable trend I think in the category. A lot of headroom to continue to premiumize."
To Doukeris' point, AB-InBev saw sales of the often higher priced Corona rise 23.5% in the third quarter — a faster clip than the company's total revenue increase of 12.1%. And the company's Beyond Beer segment, comprised mostly of various hard seltzers and beer alternatives, rose 10% from a year ago.
AB-InBev also managed to surpass most analyst estimates for the third quarter on the back of demand for higher priced offerings.
Here is how AB-Inbev performed compared to Wall Street forecasts:
Total Sales: $15.09 billion vs. $15.15 billion
Organic Revenue Growth: +12.1% vs. +10.8%
Adjusted EBITDA: $5.31 billion vs. $5.32 billion
Adjusted EPS: $0.81 vs. $0.77
AB-InBev stock is up 1% in the past month.
"Strong beat and raise emblematic of commercial momentum," Evercore ISI analyst Robert Ottenstein, who has an Outperform rating on AB-InBev shares with a $70 price target, wrote in a client note after the the company's results. "Further, guidance raise suggests high visibility on costs and continued strong demand in most markets with limited if any trade down and a new round of pricing coming in the U.S. and Europe. Valuation is compelling."
Ottenstein added that sales and margins "should improve as mobility improves and revenge partying continues through World Cup / year-end."
Doukeris echoed the optimism on the potential sales impact of the World Cup set to kick off in Qatar in late November.
"Numbers from FIFA say that like 2.5, 3 billion people watch the games globally," Doukeris said. "There are celebrations in each and every country. We will be activating in 70 countries with the local brands and local passion points. But also, Budweiser is the official sponsor of FIFA World Cup Qatar."