Financial Data and Key Metrics Changes - Depletions in the second quarter decreased by 5%, while shipments decreased by only 0.8% compared to the previous year, primarily driven by declines in the Truly Hard Seltzer and Sam Adams brands [30] - Revenue for the quarter increased by 1.5% due to increased pricing and favorable product mix, partially offset by lower volumes [31] - Gross margin for the second quarter was 49.8%, an increase of 380 basis points year over year, benefiting from improved brewery efficiencies and price increases [31] - Earnings per share (EPS) was reported at $5.45, a 24.1% increase compared to the prior year [32] Business Line Data and Key Metrics Changes - Twisted Tea held share in the overall FMB category, with dollar sales declining by 4% in measured channels last quarter [15] - Sun Cruiser has quickly grown to a 4% share of the RTD spirits category and continues to grow volumes week over week as distribution expands [20] - Dogfish Head grew depletions in the second quarter for the first time in many years, driven by the successful launch of Grateful Dead juicy pale ale [25] - Angry Orchard returned to growth in depletions, driven by increased investment and new sponsorships [26] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4%, while the company gained share [8] - The hard seltzer category declined by 7% in dollars in the second quarter as consumer preferences shift towards more premium RTD spirits [22] - The Hispanic consumer segment has been under pressure, impacting overall volume performance [14] Company Strategy and Development Direction - The company is focusing on long-term growth opportunities in the Beyond Beer category, which represents over 85% of its volume [7] - Continued investment in brand support and innovation is emphasized, particularly for Sun Cruiser and Twisted Tea [10][19] - The company is committed to a disciplined approach to investments, only pursuing clear opportunities [10] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a challenging macroeconomic environment, with factors such as economic uncertainty and poor weather negatively impacting consumer demand [6][7] - Despite near-term challenges, the management remains confident in the company's strategies and innovation pipeline to create long-term value for shareholders [11][28] - The company has updated its volume guidance to reflect a more dynamic industry environment, expecting volume to be down in the high single digits to low single digits for the year [33] Other Important Information - The company generated over $125 million in operating cash flow in the first half, enabling investments in brands and cash returns to shareholders [9] - The company ended the quarter with a cash balance of $212.4 million and an unused credit line of $150 million, providing flexibility for future investments [40] Q&A Session Summary Question: Update on business performance and Twisted Tea's decline - Management acknowledged a slow start to summer and noted that the industry is down 4-5%, but the company has gained volume and dollar share [46] - The decline in Twisted Tea is partially attributed to competition from the vodka tea category, but management believes the brand can recover as the market normalizes [49][51] Question: Clarification on updated guidance and depletion trends - Management explained that the updated guidance reflects softer depletion trends in Q2, leading to a wider range for future expectations [56][58] Question: Long-term growth potential for Sun Cruiser - Management expressed confidence in Sun Cruiser's growth potential, emphasizing a measured approach to its rollout and strong consumer reception [66][70] Question: Impact of tariffs on financial outlook - Management discussed the complexities of tariff impacts, noting adjustments based on supplier negotiations and changes in aluminum pricing [72][76] Question: Future gross margin potential - Management indicated that while current margins are strong, future performance will depend on tariff impacts and volume recovery [82][83] Question: Strategic actions in response to industry challenges - Management acknowledged the need for potential strategic actions in the industry due to ongoing structural headwinds [104]

Financial Data and Key Metrics Changes - Depletions in Q2 2025 decreased by 5%, while shipments decreased by only 0.8% compared to the previous year, primarily due to declines in Truly Hard Seltzer and Sam Adams brands, partially offset by growth in Sun Cruiser and Dogfish Head brands [28] - Revenue for the quarter increased by 1.5% due to increased pricing and favorable product mix, despite lower volumes [29] - Gross margin for Q2 was 49.8%, an increase of 380 basis points year over year, benefiting from improved brewery efficiencies and procurement savings [29] - EPS for Q2 was $5.45, a 24.1% increase compared to the prior year, driven by higher gross margins and lower share count [30] Business Line Data and Key Metrics Changes - Twisted Tea held share in the FMB category, with dollar sales declining by 4% in measured channels last quarter, while Sun Cruiser has quickly grown to a 4% share of the RTD spirits category [15][19] - Dogfish Head saw growth in depletions for the first time in years, driven by the successful launch of Grateful Dead juicy pale ale [23] - Angry Orchard returned to growth in depletions, supported by increased investment and new sponsorships [24] Market Data and Key Metrics Changes - The overall beer industry is estimated to be down over 4%, while the company's depletions were down only 3% in the first half of the year [8] - The hard seltzer category declined by 7% in dollars in Q2, indicating a shift in consumer preferences towards more premium RTD spirits [21] - Economic uncertainty and household budget tightening are negatively impacting consumer demand across the beer industry [7] Company Strategy and Development Direction - The company is focusing on long-term growth opportunities in the Beyond Beer category, which represents over 85% of its volume [7] - A culture of innovation has been built over 40 years, allowing the company to quickly adapt to consumer demand [7] - Increased brand investments are planned to support the national launch of Sun Cruiser and ensure the full portfolio is well-positioned for future industry improvements [10] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a challenging macroeconomic environment, with factors such as economic uncertainty and poor weather impacting consumer demand [6][7] - Despite near-term challenges, the company remains confident in its strategies and team, focusing on brand investments and productivity initiatives [11] - The company expects shipment declines in the second half of the year as shipments rebalance in line with depletion trends [10] Other Important Information - The company generated over $125 million in operating cash flow in the first half of the year, enabling investments in brands and cash returns to shareholders [9] - The company has lowered its capital expenditure guidance for 2025 to between $70 million and $90 million, focusing on productivity programs [38] Q&A Session Summary Question: Update on business rate and Twisted Tea vs. Sun Cruiser - Management noted that the start of summer was slow, with industry depletions down 4-5%, but the company gained volume and dollar share [42][44] - Twisted Tea is experiencing a decline, but Sun Cruiser is expected to offset some of that loss as it attracts new consumers [47][48] Question: Clarification on updated guidance and depletion trends - The company widened its depletion guidance range due to the unpredictable market environment and softer Q2 depletions [94][96] - Management indicated that Twisted Tea is not expected to grow low single digits this year, with a decline anticipated instead [95] Question: Strategic actions in response to industry challenges - The company is exploring opportunities outside of alcohol but has not found attractive options yet [108] - Management is open to innovation and strategic moves but does not foresee immediate M&A actions [108] Question: Future gross margin potential - Management expressed confidence in maintaining high gross margins despite tariff headwinds and volume reductions [80][81] - The company is benefiting from a favorable product mix, particularly from Sun Cruiser [81] Question: Twisted Tea's long-term prospects - Management remains optimistic about Twisted Tea's long-term potential, despite recent challenges, and plans to continue strong support for the brand [90]

Core Insights - AB InBev is focused on investments to drive growth and diversify its portfolio of global, international, and craft specialty premium brands [1] - The company plans to invest $300 million in its U.S. manufacturing operations in 2025 to enhance training, recruitment, and local production [2] - This investment follows a nearly $2 billion investment in U.S. facilities over the past five years, aimed at boosting the economy and sustaining jobs [3] Investment and Operations - The investments are intended to improve internal systems at U.S. manufacturing facilities, enhancing brewery efficiency and economic prosperity [4] - AB InBev reported mixed first-quarter 2025 results, with strong earnings performance but soft sales, driven by diversified operations and demand for megabrands [5] - Revenues from megabrands increased by 4.4%, particularly benefiting from the strong performance of the Corona brand [5] Digital Transformation - The company has been rapidly growing its digital platforms, with B2B digital platforms contributing approximately 72% to revenues in Q1 2025 [6] - The omnichannel ecosystem generated $275 million in revenues during the same period [6] Beyond Beer Portfolio - AB InBev's Beyond Beer portfolio saw a revenue increase of 16.6%, driven by double-digit growth in brands like Cutwater and Nütrl in the U.S. and Beats in Brazil [7] Stock Performance - Over the past three months, AB InBev's shares have increased by 25.5%, outperforming the industry growth of 18.9% [8]