By Adria Calatayud
Heineken forecast sales volumes to be broadly flat for the full year after pricing disputes with retailers in Europe held back the group's beer sales in the second quarter.
The world's second-largest brewer has sought to steer its portfolio toward the premium segment of the market and to expand beyond Europe as beer consumption stalled or declined in many developed countries in recent years. Health concerns, the growing adoption of weight-loss drugs and a generational shift away from alcoholic beverages have led drinkers to cut back on booze spending.
The Dutch company is looking to strike a balance between passing on higher costs, including from U.S. tariffs, to customers and enticing consumers to drinking beer in a tough environment for groups that sell consumer staples after years of inflation.
Heineken--which owns Amstel, Red Stripe and Birra Moretti, as well as its namesake brand--said Monday that customer disruptions in Europe and weaker markets in the Americas than originally anticipated meant it no longer expected sales volumes to grow this year. It also flagged U.S. tariffs and currency moves would have a bigger impact on its expense bill in the second half, but raised an annual cost-savings target and reaffirmed its earnings expectations.
The company said it is facing macroeconomic challenges that might hurt consumer spending in the near term, citing weakening sentiment in Europe and the Americas, inflation pressures, the impact of a weaker U.S. dollar and geopolitical fluctuations.
Shares in Heineken fell as much as 4.7% in European morning trading.
The company was locked in talks with European retailers during the first half and had previously said disputes over pricing would weigh on its sales.
Extended retailer negotiations temporarily hurt volume in Europe, but were important to preserve a sustainable development of the beer market in the future, Heineken Chief Executive and Chairman Dolf van den Brink said.
The volume of beer the group sold for the June quarter was down 0.4% on an organic basis, it said. Analysts had expected a 0.3% organic decline in beer volumes, according to consensus estimates provided by the company.
Heineken looks positioned for a volume improvement in the second half with European retailer negotiations now fully resolved, analysts at Morgan Stanley wrote in a note to clients.
Adjusted net revenue for the quarter grew 3.3% organically, with the benefits of pricing and sales mix offsetting lower volumes. This exceeded analysts' expectations of a 1.6% increase.
The company still expects revenue growth for the year as a whole thanks to a positive effect from prices and its sales mix. It also maintained its full-year forecast of organic growth of 4% to 8% in adjusted operating profit.
Heineken raised its full-year savings target to 500 million euros ($587.1 million), up from 400 million euros previously, having achieved 300 million euros already in the first half.
The company's first-half adjusted operating profit was 2.02 billion euros, up 7.4% organically compared with the year-earlier period.
Revenue for the first half as a whole fell 5% to 16.92 billion euros mainly due to adverse currency movements. The company swung to a first-half net profit of 744 million euros from a net loss of 95 million euros a year before, when its results were hit by a write-down on an investment in China.
Write to Adria Calatayud at adria.calatayud@wsj.com
(END) Dow Jones Newswires
July 28, 2025 04:38 ET (08:38 GMT)
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