By Timothy S. Donahue
Top Takeaways:
- Altria posted flat results and missed EPS expectations, with cigarette volumes continuing to slide and competition intensifying in nicotine pouches.
- On! Nicotine pouches lost market share, even after FDA authorization, amid aggressive pricing by PMI’s ZYN and growing competition from BAT’s Velo.
- NJOY remains sidelined, with Altria taking a $1.3B charge and stating it does not expect the vape brand to return to the U.S. market in 2026.
Shares of Altria Group fell Thursday after the company reported fourth-quarter earnings that were weaker than expected, weighed down by declining cigarette sales and mounting pressure in next-generation nicotine categories.
The Richmond, Virginia-based tobacco giant reported fourth-quarter revenue of $5.8 billion, down 2% year over year, primarily due to lower cigarette volumes. Adjusted earnings were $1.30 per share, narrowly missing Wall Street expectations of $1.32, according to consensus estimates.
Altria executives cited the continued erosion of cigarette sales, a long-running challenge for the industry, and attributed part of the pressure to the widespread availability of unauthorized disposable e-cigarettes, which are typically cheaper and often sold in fruit and candy flavors.
“We have long advocated for stronger enforcement against illicit products,” CEO Billy Gifford said on the company’s earnings call.
The company’s revenue from smokeable products fell 2.7%, while cigarette shipment volumes declined 7.9% during the quarter. Shares were down more than 2% in morning trading.
Altria also updated investors on its push into smoke-free alternatives, though results remain mixed. In December, the U.S. Food and Drug Administration authorized several flavors of on! Plus nicotine pouches, clearing the way for broader national expansion. However, the latest data show the brand losing momentum, with Altria reporting that on!’s U.S. market share fell to about 13%, down roughly five percentage points from a year earlier.
The U.S. nicotine pouch market remains dominated by ZYN, Philip Morris International’s flagship brand, which accounts for more than two-thirds of category sales, according to Nielsen data. Altria executives cited pricing pressure, including ZYN’s 2-for-1 promotions, as a key headwind in the quarter.
Gifford said Altria plans to roll out its own introductory pricing and promotions as it expands its FDA-authorized on! products more broadly later this year. “We feel very excited about the differentiation we have and the consumer feedback,” he told analysts.
In vaping, Altria continues to face setbacks. The company said it does not expect NJOY to return to the U.S. market in 2026, following an International Trade Commission ruling that NJOY Ace devices infringed Juul Labs patents. Altria acquired NJOY in 2023 for $2.75 billion and recorded a $1.3 billion impairment charge for its vaping business in the most recent quarter.
Looking ahead, Altria forecast 2026 adjusted earnings of $5.56 to $5.72 per share, with the midpoint slightly above analyst expectations. Price increases across cigarettes and oral tobacco remain a key lever as the company works to offset volume declines.
Gifford is scheduled to retire in May after more than five years as CEO and will be succeeded by Salvatore Mancuso, the company’s current chief financial officer.
