The world's second-largest brewer slashed its 2023 profit growth forecast following a slowdown in Asia, the US, and Europe as consumers balk at 'beerflation'. 

Heineken said operating profit plunged 22% on an adjusted basis in the first half of the year. Overall volumes slid 5.6%, exceeding analysts' average forecast of 3.4%.

The Amsterdam-based brewer blamed the "cumulative effect" of price hikes and a "challenging economic backdrop" that was responsible for a slowdown in beer demand. 

Here's a snapshot of 1H23 results:

"The start of the year was all about passing on the inflation on our input costs," Chief Executive Officer Dolf van den Brink told Bloomberg in an interview. 

Van den Brink said, "We front-loaded our pricing. We ran into a pretty strong economic slowdown in the key market of Vietnam, which is disproportionately important to us."

Heineken shares were down nearly 7% in European trading, their steepest drop since March 2020. 

Citi analyst Simon Hales called the earnings results "extremely disappointing."

Heineken expects cost pressures to ease next year, which will reduce beerflation. Previously the guidance was for mid- to high-single-digit earnings growth. 

"The credibility of Heineken's guidance is now in question," Hales said. 

RBC analysts James Edwardes Jones and Emma Letheren said, "This is the worst set of results we've had so far." They were referring to other consumer companies their desk covers. 

Here's what other Wall Street analysts are saying about the results (list courtesy of Bloomberg):

AlphaValue (add, PT €121) 

KBC (accumulate, PT €110)

RBC (sector perform, PT €93)

Citi (buy, PT €130)

Jefferies (buy, PT €115)

There are increasing signs that consumer strength worldwide might be waning as global central banks aggressively tighten monetary policy to curb the worst inflation in a generation.