Altria Group Inc. reaffirmed its full-year profit guidance even as the Marlboro maker wrestles with weak cigarette and oral tobacco product sales.
The company still expects full-year 2025 adjusted diluted earnings per share growth of 2% to 5%, it said in a statement.
Cigarette shipments in the first quarter dropped almost 14% from the same period last year, while oral tobacco products fell 5%.
Adjusted diluted earnings per share in the quarter of $1.23 a share beat Wall Street expectations. Revenue of $4.5 billion just missed the $4.6 billion estimate.
Shares gained 0.7% at 9:58 a.m. in New York Tuesday. Altria stock has gained 11% this year through the close on April 28, as the S&P 500 index fell 6%.
Altria said its full-year guidance includes the current estimated cost impacts of increased tariffs. It said it would also continue to monitor what tariffs do to the US overall economy along with adoption of smoke-free products, government action against illicit vape products and regulatory developments.
On a call with investors, Chief Executive Officer Billy Gifford downplayed the potential impact of tariffs.
“We are predominantly a US company with a US-focused supply chain,” he said. “While certain materials may be impacted, for example tin and aluminum that are used in some of our packaging, the impact on our costs are limited.”
The company took an $873 million non-cash hit in the first quarter due to an import ban on its NJOY Ace vapes following a patent fight with Juul. NJOY had already stopped shipping ACE to wholesalers the week before the ban went into effect on March 24, but retailers can sell whatever inventory they have left.
Altria, like rival Philip Morris International, is adjusting its business to focus on smokeless alternatives, like e-cigarettes and nicotine pouches, as traditional cigarettes fall out of favor.
The competition in the oral tobacco market is intensifying as Zyn, owned by Swedish Match, a subsidiary of Philip Morris, gains market share. This poses a challenge to Altria’s growth in alternative products including its NJOY vape products and On! oral nicotine pouches.
In the final days of US President Joe Biden’s administration, regulators put forward a proposal to reduce nicotine content in cigarettes. But the Trump administration appears unlikely to push forward with this initiative, allowing Altria to continue selling its products without major regulatory changes, at least in the near term.
Around the same time, the Food and Drug Administration authorized 20 Zyn nicotine pouch products for marketing to adults, marking the first time it has approved nicotine pouches. The move gave Philip Morris International a significant advantage in the oral nicotine market, as Altria’s On! pouches still lack similar FDA authorization.
In January, the Trump administration withdrew the FDA’s proposed menthol ban, signaling a broader shift away from aggressive tobacco regulation. Menthol cigarettes account for roughly 10% of Altria’s cigarette sales, according to Bloomberg Intelligence.
Written by: Fiona Rutherford @Bloomberg
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