Altria Group said it expects profits to get a lift in the second half of the year by taking advantage of a U.S. tax rebate tied to higher cigarette imports and exports, even after narrowly missing fourth-quarter 2025 profit estimates. Despite forecasting full-year 2026 earnings above analysts’ expectations, Altria’s shares fell about 2.8% following the update.
The boost is expected to come from the so-called “double duty drawback,” a provision that allows tobacco companies to reclaim federal excise taxes paid on domestically sold cigarettes when they export similar products. According to Reuters, while rivals such as British American Tobacco have long benefited from this mechanism, Altria historically could not because it sells cigarettes only in the U.S. The company is now expanding exports through partnerships and contract manufacturing deals with foreign firms, including South Korea’s KT&G.
Altria executives said using the rebate is necessary to remain competitive as cigarette sales continue to decline. The company has been investing in alternative products, such as its On! nicotine pouches, though competition has intensified.
