Bud Light Sales Continue Crashing after Controversial Promotion. Coors Light Sales Surge

Facing unprecedented backlash, beer magnate Anheuser Busch InBev (BUD) is witnessing a drastic dip in sales for several key brands. The company's sales downfall has been attributed to an ill-received marketing campaign featuring transgender influencer Dylan Mulvaney and Bud Light. The controversy has hit Busch Light especially hard, recording a notable slump in sales.

Nielsen data reveals a significant decrease in sales volume for well-known brands like Bud Light, Michelob Ultra, Budweiser, and Natural Light. Bud Light sales, in particular, witnessed a stark 24.6% drop in the week ending May 13, as compared to the same week in 2022.

Meanwhile, amidst Anheuser-Busch's waning fortunes, competitor brand Coors Light is seeing a rise in sales figures. The company recorded a 16.9% volume increase, indicating a shift in consumer preferences.

Analysts from JPMorgan anticipate a sizeable dent in Anheuser Busch InBev's U.S. profits for this year, expecting a 26% drop in earnings before interest and tax (EBIT), a 12% volume reduction, and a 10% sales decline. Despite the bleak outlook, analysts predict improved margins as costs per liter drop, and shareholders may witness boosted returns as the company optimizes its balance sheet.

While a recovery in sales for Anheuser Busch InBev is not predicted in the Fiscal Year 2024, JPMorgan's analysts believe the risk-reward ratio is currently favorable. However, they also state that there is a subset of American consumers who may avoid Bud Light indefinitely. Since the controversy erupted, Anheuser Busch's shares have seen an 11% decrease from the beginning of April.