Imperial Brands issued an earnings warning on Sept. 26 reflecting a deteriorating market for next-generation products (NGPs) in the United States and changes to results expectations in its Africa, Asia and Australasia division.
The company now expects group net revenue for the year to grow at around 2 percent with earnings per share expected to be broadly flat at constant currencies.
A recent vaping-related public health scare and regulatory crackdown has caused the U.S. market for NGPs to slow considerably with an increasing number of wholesalers and retailers not ordering or not allowing promotion of vapor products, according to Imperial Brands.
Despite the challenges, Imperial Brands believes that NGPs will continue to provide significant opportunity to deliver additive growth to complement its tobacco business.
“We continue to refine our investment behind building a strong and profitable NGP business in a rapidly evolving market,” the company wrote in a statement.