Analyst Note| Philip Gorham, CFA, FRM |
Anheuser-Busch InBev beat our second-quarter 2021 volume growth estimates thanks to a strong performance in Latin America. The good news will be overshadowed, however, by concerns over short-term profitability. The first-half gross margin missed our estimates by around 60 basis points, and the retention of the guidance of full-year underlying EBITDA growth of 8%-12% implies that margins will continue to come under pressure throughout the rest of the year. This is not surprising, however, as most consumer staples companies, notably Unilever and Nestle, have reported that commodity cost inflation is beginning to bite. We have slightly lowered our gross margin forecast for this year and next. Although we had already anticipated material cost inflation, the prices of packaging materials and distribution costs have continued to increase since our last update.