AB InBev Q3 Results: EPS Up; Costs Rise

AB InBev’s third-quarter results showed broad operating growth beyond its core beer brands, while rising commodity, freight, and marketing costs squeezed margins and could pressure near-term profits.

Earnings, Dividend, and Volume Growth

AB InBev (BUD) reported on October 29 that organic revenue rose 4.9% in the quarter, with reported revenue increasing 9.1% to $16.5 billion, boosted by currency translation. Total volume grew 0.4%, driven by a 4.0% gain in non-beer products, while beer volume declined 0.1%. Revenue per hectoliter, a measure of pricing and mix, rose 4.2%. The company identified the release as containing regulated and inside information.

Normalized EBITDA increased 3.9% to $6.0 billion, though the EBITDA margin contracted 34 basis points to 36.1%. Underlying profit rose to $2.4 billion from $2.0 billion, and reported net income attributable to AB InBev equity holders climbed to $1.6 billion from $1.1 billion. Underlying earnings per share (EPS) rose 22.4% to $1.21, or 13.9% on a constant-currency basis. Chief Executive Michel Doukeris said the results reflect “delivering solid growth today while investing for tomorrow.”

For the first nine months, reported revenue increased 10.7% to $48.4 billion, normalized EBITDA rose 5.0% to $17.3 billion, and underlying EPS climbed 22.2% to $3.40.

The board approved an interim cash dividend of €0.40 per share for fiscal 2026, up from €0.15 a year earlier. The dividend will be paid from 2026 operating results and carried-forward profits without drawing on capital reserves. It is subject to Belgian withholding tax, generally 30%, with possible treaty reductions; South African tax treatment applies to qualifying JSE-held shares. The dividend goes ex-dividend on Euronext on November 19, 2026, with a record date of November 20 and payment scheduled for November 23. The final JSE trading day to qualify is November 18.

Rising Costs and Outlook

AB InBev said commodity, freight, marketing, and other costs weighed on profitability, contributing to the margin contraction. Reported cost of sales reached $7.2 billion, the highest since 2023.

Sales in China fell 16.8% in the quarter, offsetting growth in other regions. The company reported record-high volumes in 15 markets. Secondary reports linked some cost pressure to higher expenses related to the Middle East conflict and expiring hedges.

AB InBev maintained its expectation that 2026 EBITDA growth will remain within its medium-term outlook range of 4% to 8%. Its fiscal 2026 assumptions include an average gross debt coupon of about 4%, a normalized effective tax rate of 26% to 28%, and net capital expenditure of $3.5 billion to $4.0 billion. The tax-rate outlook excludes potential future legislative changes.

The results highlight a divergence between earnings growth and operating leverage, with profit metrics improving even as margin pressure persists. By combining a larger interim dividend with a notable EPS gain and steady EBITDA guidance, AB InBev signaled a willingness to prioritize shareholder returns despite near-term cost challenges.