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The world’s largest brewer AB InBev suffered a sharp sales drop in the US amid political controversy over a Bud Light marketing campaign, to reduce overall sales volumes in its second quarter.

The group said US revenues plunged 10.5% in the second quarter, with EBITDA down 28.2% in the country “primarily due to the volume decline of Bud Light”.

The Bud Light sales drop is in relation to a consumer boycott of the brand in the US following its use of a transgender personality, Dylan Mulvaney, in a marketing campaign.

Despite the headline sales drop, AB InBev insisted: “Since April, we actively engaged with over 170 000 consumers across the country through a third-party research firm and the data shows that most consumers surveyed are favourable towards the Bud Light brand and approximately 80% are favourable or neutral.”

Overall, total revenues increased by 7.2% in the second quarter, with revenue per hl growth of 9% driven by pricing and premiumisation.

Second quarter volumes declined by 1.4%, with own beer volumes down by 1.8% and non-beer volumes up by 0.5% hampered by its North American volume slump.

EBITDA increased by 5.0% with margin compression of 69bps, driven by anticipated commodity cost headwinds and increased sales and marketing investments.

In the first six months of the year, normalised EBITDA increased by 9.1% to $9.7bn, but margin contracted by 29 bps to 33% due to a one-off impact of tax credits in Brazil.

Revenues in the first half were up by 10%, with revenue per hl growth of 10.6%.

AB InBev expects EBITDA to grow in line with its medium-term outlook of between 4%-8% and its revenue to grow ahead of EBITDA from a healthy combination of volume and price.

“Our business delivered another quarter of profitable growth,” said AB InBev CEO Michel Doukeris. “We continue to invest in our strategic priorities for the long term.”

AB InBev shares are up 2.6% this morning to €52.39.

Morning update

Pets at Home has posted a double-digit rise in consumer revenues in its first quarter, driven by both value and volume growth.

Consumer revenue was up 10.2% to £568.2m, supported by continued growth in its active VIP base of 4% to 7.7 million people.

Total group-wide revenues were up 7.9% to £436.8m, with group like-for-like revenue up 7.9%.

Retail revenue growth was 7.1%, with food category remaining in volume growth across grocery and premium categories supported by further progress in its relative price position.

Accessories trends were consistent with previous quarters.

Vet group revenue was up 16.3%, increasingly supported by number of visits (as we increased vet capacity), improving mix and continued growth in average spend.

Guidance remains unchanged for the full year, with the group comfortable with current analyst expectations, albeit noting its first half bottom line will incur additional costs to ramp up its new DC (£6m) and a brand relaunch (£2m).

In addition, it has made the decision to consolidate its vet and retail support offices. This move will result in a £3m one-off transition cost in the year.

“Our performance in the first quarter has been encouraging,” said CEO Lyssa McGowan. “The quality of our growth has remained strong as we grew transaction volumes and continued to acquire new consumers at an impressive rate, as our compelling value, range and service continues to resonate with consumers.

“It has also been a quarter of steady delivery against our strategic plan we set out in May. We have expanded and enhanced our physical estate, made good progress in the development of our digital platform, and continued the transition to our new distribution facility, as we execute on our ambition to build the world’s best petcare platform.”

On the markets this morning, the FTSE 100 has continued its slump from yesterday, dropping a further 1.3% to 7,460.3pts.

Risers this morning include Hotel Chocolat, up 3.3% to 114.7p, Greencore, up 1.7% to 89.3p and AG Barr, up 0.8% to 489.6p.

Fallers include Nichols, down 4.3% to 1,005p, Ocado, down 2.4% to 863.8p and Just Eat Takeaway.com, down 2.1% to 1,282p.

Yesterday in the City

The FTSE 100 suffered a 1.4% plunge yesterday back to 7,561.6pts as a shock credit downgrade of the US sparked an international shares sell-off.

Coca-Cola Europacific Partners was up 4.8% to €60.25 as it is in advanced talks to buy the Filipino Coke bottler from the Coca-Cola Company in a deal that could be worth $1.8bn (£1.4bn).

Haleon dropped 2.5% to 321.7p despite raising its sales forecast for the year after registering double-digit first-half growth.

Kerry Group was up 0.8% to €91.45 after reporting “a good performance” in the first half as revenues were boosted by price rises and acquisitions.

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