Altria Group (NYSE:MO) surpassed revenue and profit expectations on Tuesday, bolstered by the rising popularity of spitless nicotine pouches and strategic pricing adjustments. The company has been combatting the shift of consumers to more affordable brands in light of persistent inflation by implementing price hikes.
Altria’s focus on premium offerings from its renowned Marlboro brand of cigarettes in the U.S. has proved successful, with Marlboro currently commanding an impressive 58.6% share of the premium segment.
In line with fellow industry player, Philip Morris (NYSE:PM), Altria also benefited from the increased demand for spitless nicotine pouches, providing an appealing alternative to traditional moist chewing tobacco. Notably, Altria’s on! nicotine pouches experienced a remarkable 47.8% surge in shipment volumes compared to the same quarter last year.
To further expand its portfolio and cater to changing consumer preferences, Altria completed the acquisition of e-cigarette startup NJOY Holdings in June. This addition included the NJOY ACE pod-based vape, which responds to the growing demand for alternatives to conventional combustible cigarettes.
In the second quarter, Altria’s net revenue rose by 1.2% to $5.44 billion, slightly exceeding the average analyst estimate of $5.43 billion, as reported by Refinitiv data. Excluding extraordinary items, the company’s quarterly profit stood at $1.31 per share, surpassing Wall Street expectations of $1.30 per share.
Despite the challenges posed by planned investments in NJOY ACE within the U.S., Altria remains confident in its financial outlook. The company reaffirmed its annual profit forecast, which had been adjusted in June, anticipating an annual adjusted profit ranging from $4.89 to $5.03 per share, compared to the previous forecast of $4.98 to $5.13 per share.
Featured Image: Unsplash @ Brendan Stephens
Author Faith Yakubu 
