Bernstein: Asahi and Kirin improve overseas in third quarter, while Japanese beverage businesses remain under pressure

How much support can European improvements provide for Asahi?

Nielsen data show that Asahi’s sales in the UK retail channel rose 14% year on year in the third quarter of 2026, outpacing the industry’s 4%; sales in Italy rose 11%, rebounding from a 7% decline in the second quarter and also outpacing the industry’s 5%.
Consumer data in Central and Eastern Europe also improved: retail sales in the Czech Republic rose 7% year on year from 7 to August, while Poland grew 4%. However, Bernstein expects beer sales to remain disrupted after Poland implements its beverage container deposit scheme.
The bank expects Asahi’s European revenue and operating profit to grow 5% and 2% year on year, respectively, at constant exchange rates in the third quarter, with profit growth trailing revenue growth.

Australian Taxation Office data show that third-quarter beer volumes in the on-premise channel rose 5% year on year, while retail volumes fell 2%. Retailer Endeavour’s comparable sales grew 3% over the same period, above 1.4% in the first half. Bernstein believes the improved product mix is enough to offset the decline in retail volumes.
Asahi has a relatively high market share at Endeavour, so the bank views the retail data as a positive signal for its performance. Together with ongoing cost savings, Bernstein expects Asahi Oceania’s third-quarter revenue and core operating profit to grow 4% and 7% respectively at constant exchange rates; the corresponding figures for Kirin’s Australian beer business are 2% revenue growth and 1% normalized operating profit growth.

Summer beer sales in Japan were weak. Asahi and Kirin’s beer-category revenue fell 5% and 8% year on year, respectively, in July, and 3% and 6% in August; although they returned to growth of 1% and 3% respectively in September, Kirin’s benefit from stockpiling of low-malt products ahead of the tax increase in October was still well below Bernstein’s expectations.
Asahi’s Japanese soft drink volumes fell 4%, 8% and 15% year on year, respectively, from July through September. Bernstein expects weaker operating leverage in the non-beer and soft drink businesses, together with beer marketing spending, to reduce Asahi’s overall Japanese revenue and core operating profit by 2% and 5%, respectively, in the third quarter.
Kirin’s Japanese alcoholic beverages business was also affected by weaker-than-expected pre-tax stockpiling and weakening operating leverage. The bank expects third-quarter revenue and operating profit to fall 9% and 13%, respectively.

Bernstein estimates that foreign currency translation will increase third-quarter core operating profit at Asahi Group by about 6% and normalized operating profit at Kirin Group by about 3%. But given the strong foreign exchange headwinds facing Asahi as it enters the fourth quarter and weak momentum in Japanese soft drinks, the bank cut its earnings per share forecasts for fiscal 2026 and 2027 by 1.8% and 1.5%, respectively.
Kirin’s earnings per share forecasts for the same periods were raised by 2.6% and 1.4%, respectively, mainly because of the earnings uplift from Kyowa Kirin’s third-quarter performance. Bernstein maintained its Outperform rating and 2700 yen target price for Asahi, and its Market Perform rating and 2900 yen target price for Kirin.