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Tag: Altria Group

  • Altria Posts $6.26 Billion in Revenues

    Altria Posts $6.26 Billion in Revenues

    Photo: Maurice Norbert

    Altria Group reported net revenues of $6.26 billion for the third quarter of 2024, down 0.4 percent from the comparable 2023 quarter. Revenue net of excise taxes increased 1.3 percent to $5.34 billion.

    “Altria delivered outstanding results in the third quarter,” said Altria CEO Billy Gifford in a statement. “The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while On! maintained momentum in the marketplace. We also continued to reward shareholders through a growing dividend and share repurchases while making investments in pursuit of our vision.”

    “We also announce today a new Optimize and Accelerate initiative designed to modernize our processes, which we believe will accelerate progress toward our vision, and we reaffirm our guidance to deliver 2024 full-year adjusted diluted EPS in a range of $5.07 to $5.15. This range represents an adjusted diluted EPS growth rate of 2.5 percent to 4 percent from a base of $4.95 in 2023.”

  • Altria Worried About Illicit Pouches

    Altria Worried About Illicit Pouches

    Photo: Tobacco Reporter archive

    Altria Group is worried about growing illicit sales of modern oral products in the United States, reports Reuters. The company has shared data on illegal nicotine pouches with the U.S. Food and Drug Administration.

    “This illicit market echoes the beginning of the illicit e-vapor market several years ago,” Altria CEO William Gifford told analysts during a financial update. “We believe it is critical that the FDA acts decisively to regain control of the oral nicotine pouch category to prevent another widespread illicit market from taking hold,” he added.

    Altria said it had identified more than 350 unique illegal nicotine pouches on sale, with new brands launching every month.

    Gifford said Altria had also observed an increase in illicit cigarettes, one survey of discarded packs in California finding that some 25 percent were non-U.S. brands, mostly originating from duty-free channels or China.

    Last month, Philip Morris International said it had observed sales of its nicotine pouches intended for the Scandinavian market on sale in the United States.

    Recently, British American Tobacco’s CEO expressed concern about the continued lack of enforcement against unauthorized single-use vapes in the U.S., which makes it difficult for authorized brands to compete in that market.

  • Altria Reports Results

    Altria Reports Results

    Image: Altria Group

    Altria Group reported net revenues of $6.21 billion for the second quarter of 2024, down 4.6 percent from the comparable 2023 quarter. Revenue net of excise taxes declined 3 percent to $5.28 billion.

    The company attributed the decreases to lower net revenues in the smokeable products segment, partially offset by higher net revenues in the oral tobacco products segment.

    “Altria’s momentum continues to build as we pursue our vision to responsibly lead the transition of adult smokers to a smoke-free future,” said Altria CEO Billy Gifford in a statement.

    “In the second quarter, our companies’ innovative smoke-free products delivered strong share and volume performance, and we hit meaningful milestones that we believe set us up for future success. Njoy received the first and only marketing granted orders from the FDA for menthol e-vapor products, and we submitted PMTA applications to the FDA for next generation Njoy and On! products.

    “Our traditional tobacco businesses also remained resilient, despite a challenging operating environment. Our highly cash generative businesses supported continued investments in our innovative product efforts, and we returned significant value to shareholders during the first half of the year, with more than $5.8 billion delivered to shareholders through share repurchases and dividends.”

  • Altria Submits PMTA for ‘On! Plus’ Pouches

    Altria Submits PMTA for ‘On! Plus’ Pouches

    Image: maurice norbert

    Altria Group has submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration for its “On! Plus” oral nicotine pouch products. The PMTAs were submitted by Altria’s wholly owned subsidiary Helix Innovations.

    On! Plus is a spit-free, oral tobacco-derived nicotine (TDN) pouch product made from a proprietary “soft-feel” material to provide a more comfortable product experience. The On! Plus pouch is designed for adults who dip and adult dual users (i.e., adults who smoke and dip).

    According to Altria, On! Plus pouches are seamless and larger than the leading U.S. TDN brands. Similar to the currently marketed On! products, On! Plus packaging features a compartment to responsibly dispose of used product. Helix submitted PMTAs for three distinct On! Plus varieties: tobacco, mint and wintergreen. Each variety comes in three different nicotine strength options.

    “Helix’s submission of the On! Plus applications underscores Altria’s commitment to addressing consumers’ evolving preferences through innovation in potentially reduced risk products. We firmly believe that On! Plus is a transformative product that will meaningfully contribute to Helix’s growth in the U.S. market, upon timely FDA authorization,” said Nick MacPhee, managing director and general manager of Helix in a statement.

    “We’ve long believed in the value of a robust marketplace of authorized smoke-free products for adult tobacco consumers. We believe that these PMTAs demonstrate that responsibly marketed On! Plus pouches can provide a compelling alternative in the marketplace,” said Paige Magness, senior vice president of regulatory affairs, Altria Client Services.

    Upon authorization, Altria expects the products to be distributed by Altria Group Distribution Co.

    Helix currently sells On! nicotine pouches in the U.S. In the first quarter of 2024, On! shipment volume grew 32 percent versus the prior year and the brand achieved a 7.1 percent retail share of the total U.S. oral tobacco category.

    Altria entered the U.S. oral nicotine products market in 2019 after signing a deal with Burger Söhne to acquire an 80 percent ownership stake in some companies that commercialized On! Products, according to The Wall Street Journal. In December 2020 and April 2021, Altria subsidiaries concluded transactions to buy the remaining 20 percent stake of the global on! business for about $250 million.

    Altria’s PMTA announcement comes after Philip Morris International’s Swedish Match North America unit suspended nationwide sales on its U.S. website as local officials in Washington, D.C., investigate whether the company is in compliance with the district’s ban on the sale of flavored products.

  • Altria Reaffirms Guidance

    Altria Reaffirms Guidance

    Photo: Maurice Norbert

    Altria Group reported net revenues of $5.58 billion for the first quarter of 2024, down 2.5 percent from the comparable 2023 period. Revenues net of excise taxes declined 1 percent to $4.72 billion. The company reaffirmed its 2024 full-year adjusted diluted earnings-per-share guidance range of $5.05 to $5.17.

    Altria attributed the income declines to lower net revenues in the smokeable products segment, partially offset by higher net revenues in the oral tobacco products segment and the “all other” category.

    Marlboro’s retail share of the total cigarette category was 42 percent, unchanged from the prior year. The brand’s share of the premium segment was 59.3 percent, an increase of 0.7 share points versus the prior-year period.

    The company shipped 1 million Njoy devices and 10.9 million units of Njoy consumables during the quarter. Njoy held a 4.3 percent share of the U.S. mini-outlet and convenience channel segment.

    “We made meaningful progress in pursuit of our vision, and our highly profitable traditional tobacco businesses continued to perform well in a challenging environment,” said Altria CEO Billy Gifford in a statement, referring to the company’s ambition “to responsibly lead the transition of adult smokers to a smoke-free future.”

    “In spite of the absence of an effective regulatory environment, we saw continued early momentum from Njoy and believe our businesses are on track to deliver against full-year plans.

    “We also demonstrated our continued commitment to maximizing the return on our investments and delivering strong shareholder returns through the sale of a portion of our investment in ABI and the subsequent expansion of our share repurchase program in March,” Gifford said, referring to Altria Group’s March sale of 35 million ordinary shares of Anheuser-Busch InBev.

  • U.S. Market Poised for Disruption

    U.S. Market Poised for Disruption

    Photo: vfhnb12

    The American tobacco market is poised for disruption as Altria Group’s exclusive U.S. distribution rights to Philip Morris International’s IQOS heat-not-burn product expires on April 30, reports The Wall Street Journal. After this date, PMI will be free to compete in the U.S. with its top noncigarette brand.

    PMI hopes IQOS can help it grab a 10 percent share of the lucrative U.S. cigarette and heated-tobacco market by roughly 2030, representing an additional $2.2 billion in annual earnings before interest, taxes, depreciation and amortization, according to Stifel analysts.

    Altria, with its 50 percent share of the American cigarette market, has a lot to lose if PMI can persuade more smokers to switch to noncombustible alternatives.

    In recent years, U.S. smokers have become more receptive to alternative nicotine delivery methods. Last year, 40 percent of all nicotine products sold in the U.S. were smoke-free offerings such as e-cigarettes and oral nicotine pouches. The share of traditional cigarettes, meanwhile, declined to 60 percent last year from 80 percent in 2018.

    If the trend continues, Americans will be more likely to reach for a vape or nicotine pouch than a cigarette within three years.

    Already earning some 40 percent of its net revenue from smoke-free products, PMI needs not worry about the dwindling number of U.S. smokers because it doesn’t sell cigarettes in America.

    Altria, by contrast, still relies heavily on combustible cigarettes, which currently account for 85 percent of its sales. Its comparatively low exposure to the smokefree market includes brands such as On! oral nicotine pouches and Njoy e-cigarettes. The company also has a joint venture with Japan Tobacco to launch Ploom heated tobacco sticks in the U.S. and is working on its own heat-not-burn brand.

    A badly timed bet on Juul Labs saddled the company with a $12.5 billion loss.

    On the flipside, Altria has a strong U.S. distribution network, which it can leverage to promote its brands—a considerable advantage as the point of sale is one of the few places where tobacco companies are still allowed to advertise their products.

    Altria can also harness data to defend its patch. The tobacco giant is integrated into many retailers’ loyalty programs, allowing it to monitor what shoppers are buying.

  • Altria to Sell Part of its Anheuser-Busch Stake

    Altria to Sell Part of its Anheuser-Busch Stake

    Photo: Rafael Henrique

    Altria Group plans to sell a portion of its investment in Anheuser-Busch InBev (ABI) through a global secondary offering. In addition, ABI has agreed to repurchase $200 million of ordinary shares directly from Altria, concurrently with, and conditional on, completion of the offering.

    Altria currently holds approximately 197 million shares of ABI, representing approximately 10 percent ownership. Altria, as the selling shareholder, is offering 35 million of ABI’s ordinary shares. In connection with the offering, Altria expects to grant the underwriters an option to purchase up to 5.25 million additional ABI shares owned by Altria, exercisable within 30 days following the pricing of the offering. In addition, Altria has agreed to a 180-day lockup with the lead underwriter for our remaining ABI shares.

    “As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” said Altria CEO Billy Gifford in a statement.

    “Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”

    Following its investment sale notice, Altria announced a $2.4 billion increase to its existing $1 billion share repurchase program. The expanded program is expected to be completed by Dec. 31, 2024.

    Altria expects cash savings from the elimination of future dividend payments on the repurchased shares.

    “These opportunistic capital allocation decisions reflect our ongoing confidence in Altria’s future and the significant value offered in our shares today,” said Gifford. “We have a longstanding history of returning cash to our shareholders, and today’s announcement reflects our continued desire to create long-term shareholder value.”

  • Hernandez Retires from Altria Board

    Hernandez Retires from Altria Board

    Image: Casimiro

    Jacinto J. Hernandez retired from Altria Group’s board of directors effective Feb. 23, 2024. Hernandez will continue to serve Altria as a strategic advisor under a five-year agreement.

    “We thank Jacinto for his service on our board,” said Kathryn McQuade, Altria’s independent board chair, in a statement. “Our board benefited from his industry experience and financial expertise.”

    “I joined Altria’s board because I am inspired by Altria’s vision to responsibly lead the transition of adult smokers to a smoke-free future,” said Hernandez. “I am pleased that this agreement will allow me to focus my attention on helping Altria pursue its vision working directly with management.”

    Hernandez is founder and principal of Cummings Consulting and Management. He previously served as a partner and investment analyst for Capital Group and its subsidiary, Capital World Investors.

    He joined the Capital Group companies in August 2000 and retired in June 2022 after having spent 22 years covering a variety of industries, including U.S. tobacco, helping lead the research portfolio for one of the largest growth mutual funds in the world and serving in key leadership roles.

    Hernandez is a director of Aris Water Solutions. He previously served as a director of Pioneer Natural Resources Co.

  • Altria Reports 2023 Results

    Altria Reports 2023 Results

    Photo: Maurice Norbert

    Altria Group reported net revenues of $5.98 billion for the fourth quarter of 2023 and net revenues of $24.48 billion for the full fiscal year, down 2.2 percent and 2.4 percent, respectively, from the comparable 2022 periods.

    The decrease in the fourth quarter and the full year were both driven primarily by lower net revenues in the smokable segment, which were partially offset by higher net revenues in the oral products segment.

    “It was a pivotal year for Altria as we made significant progress in pursuit of our Vision by enhancing our smoke-free product portfolio while our businesses performed well in a challenging environment,” said Altria CEO Billy Gifford in a statement. “We grew adjusted diluted EPS by 2.3 percent and continued our long history of rewarding shareholders by delivering nearly $7.8 billion in dividends and share repurchases.”

    “Our plans for 2024 include a continuation of our strategy to balance earnings growth and shareholder returns with strategic investments toward our Vision. We expect to deliver 2024 full-year adjusted diluted EPS in a range of $5.00 to $5.15, representing a growth rate of 1 percent to 4 percent from a $4.95 base in 2023.”

  • Court Dismisses Njoy Lawsuits, Allows Elf Bar

    Court Dismisses Njoy Lawsuits, Allows Elf Bar

    A U.S. District Court in California has dismissed a lawsuit filed by NJOY, the vape subsidiary of Altria Group, against multiple manufacturers, distributors, and retailers of disposable vapes. However, the case against IMiracle, the manufacturer of Elf Bar, has not been dismissed.

    NJOY filed the lawsuit last October. The company alleges that the companies named in the suit are selling products illegal in California and the United States. NJOY asked for a nationwide injunction that would prevent future importation and sale of the products, and compensatory and punitive damages paid to NJOY.

    Among the companies charged were manufacturers and distributors of Breeze, Elf Bar, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar. Together the brands make up the majority of the U.S. disposable vape market.

    The dismissal order was entered on Jan. 18 by Judge Terry J. Hatter Jr. of the U.S. District Court for the Central District of California. The court found that the defendants did not participate in “the same transaction, occurrence, or series of transactions or occurrences,” and therefore were improperly joined in the lawsuit. Because of that, Judge Hatter dropped all parties from the suit except the first named defendant, IMiracle, according to media reports.

    The judge entered the orders “without prejudice” allowing NJOY to refile against the dismissed defendants individually or in smaller groups with demonstrable relationships. The court also dismissed NJOY’s claim of unfair competition and its motion for a preliminary injunction barring sales and distribution by the defendants.

    The court denied NJOY’s motion to serve IMiracle, the manufacturer of Elf Bar headquartered in Hong Kong, by email, citing an established international process, the Hague Convention, for serving legal notice to foreign defendants.

    NJOY’s lawsuit against IMiracle cannot proceed until the Chinese manufacturer is served notice.