Fourth quarter net income was down 43%.
Because of the coronavirus crisis in China impacting sales there, the world’s largest brewer predicted its net income for the first quarter will be down 10% on Thursday, and shares fell 9.2%.
Bloomberg reported Brito was not awarded a bonus for the last half of last year.
“Our performance in 2019 was below our expectations, and we are not satisfied with these results,” Brito said in a conference call with analysts.
In large part that’s because consumers are continuing to give a cold shoulder to old established brands like Budweiser and Bud Light as they turn toward craft beers and particularly, hard seltzers.
Anheuser-Busch has done a good job directing consumers to its pricier premiums from Michelob, and it has a sizable presence as a craft brewer. But that hasn't been enough.
The company said losses from its main label beers stabilized somewhat in 2019 after years of decline.
The company was late to jump on the seltzer bandwagon, after White Claw (from Mark Anthony Brands, and Truly (from Boston Brands), quickly took up a huge share of the market.
Budweiser hit back with the new Bud Light Seltzer, Natural Light Seltzer, and Bon & Viv. Now it has to grow those brands.
“For sure, it's a huge opportunity for us and for the beer industry in general in the U.S.,” Brito told an analyst. “It's bringing new consumers to the category from wine, from spirits. We started in this category with a 10% share. We're number three today.”
Brito wants the brands to grab 20% of the market.
The coronavirus problem is an even harder issue to tackle, and it’s an odd but relatable example of how businesses seemingly unrelated to the problem are being badly affected. In short, as the virus has gripped China, it’s emptied restaurants and bars.
Brito estimated the company would lose $285 million in revenue and $170 million in pre-EBITDA income for the first two months of this year because of the virus.
What’s ahead? “So the financial impact on our business in China is difficult to estimate, given it's dependent on the containment of the virus and especially the speed by which our customers and consumers resume their normal operations and lives which can be different by [distribution] channel,” Brito said.
There is a bright side for the beermaker, though. Brito said Chinese consumers were surveyed by the Kantar market research company, which asked what they want to do once life gets back to normal and they’re released from confinement or quarantine.
“And out of the 10 top things they want to do, the top six are totally within our business realm,” he said. “They want to go back to restaurants. They want to go back to meet friends to dine out to entertain to go outdoors indoor entertainment to do everything that they would normally do. So that's squarely within our dream of bringing people together.”
He said when the crisis subsides, he wants those beer taps to be ready to go because the return to socializing with drinks "will be very fast.”