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Being a publicly-held company is tricky turf, where even minor blips can send shareholders into spasms. Ask Heineken who missed expectations and experienced its biggest share price drop since 2011.
Here’s the deal…
Heineken stock fell sharply on July 29th after the Amsterdam-headquartered company announced that its profits fell in the first half of the year. And just like American craft beer’s 2018 slowdown, it’s not the world’s second largest brewer didn’t grow, they just didn’t grow as much as had been hoped.
Heineken reported a 0.3% rise in operating profit to €1.78 billion between January and June but that was far short of the expected €1.91bn that analysts had expected.
Heineken stock had hit all-time highs on Friday ahead of its half-year reporting. And shares fell 6% when the results were announced, the biggest fall the company’s shares have experienced since 2011.
And again it’s not like Heineken’s half-year results sucked…
Its Beer sales grew across all regions, with double digit growth in Asia Pacific and Africa, Middle East & Eastern Europe. But sales volumes fell 1.5% in Europe the result of cooler early-summer weather in Europe and no World Cup. And net profit fell 1.4% to €936 million as rising packaging costs (read: aluminum) ate into beer sales.
Up until now the company has been on a commanding roll…
Heineken’s net profit in the first quarter grew 15% to €299 million as beer volumes rose 4.3%. That after showing double digit volumes growth in 2018. The company’s alcohol-free beer Heineken 0.0 is booming in Europe.
Its rival, Anheuser-Busch InBev reported its fastest beer sales growth in five years last week, which had added to expectations around Heineken’s results.
But not meeting expectations can be brutal when you’re a publically held company (just ask Boston Beer). And adding to shareholder hopes was Budweiser brewer, Anheuser-Busch, reporting its fastest beer sales growth in five years last week…
Heineken stock fell 5.7% in early trading, on course for its worst daily performance in 8 years according to Barron’s
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