Quick overview

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Heineken reduced the range of its profit projections as consumer demand was negatively impacted by macroeconomic factors like inflation. “Adjusted operating profit growth will now be at the lower end of our forecast range of 4 percent to 8 percent,” the Dutch brewer said. According to a statement released by the brewer on Wednesday, the lower guidance follows a 40.3 percent decline in beer volumes during the third quarter amid lower growth in Europe and the Americas.

 

As retailer disputes throughout Europe hindered sales and made it more difficult for Heineken to capitalize on the summer heat wave, Heineken volumes also fell in the second quarter. At the same time, it reported that disagreements with regional buying groups in Western Europe over price hikes had persisted later in the quarter than expected.

Simon Hales and other Citi analysts wrote in a note that Heineken’s declining profit outlook is to be expected. “The lack of new negatives and possible additional short covering is likely to limit further downside, even though the backdrop remains lacklustre,” he stated. It concludes yet another challenging quarter for Heineken, which is battling erratic consumer demand and unfavorable weather in important markets.

The company now anticipates a slight decline this year after previously stating that volumes would remain largely stable. Among the nations with slower growth were the US and Brazil.

The decline in revenue has also been attributed to currency headwinds. The brewer previously revealed plans to restructure its Amsterdam headquarters starting next year, which is expected to affect 400 jobs.