Altria Group NYSE: MO reported third-quarter adjusted diluted earnings-per-share growth of 4.8% and raised its full-year outlook, citing performance in its smokable products business, continued investment in nicotine pouches and cash returns to shareholders.
Chief Executive Officer Sal Mancuso said the company’s businesses continued to generate cash while Altria invested in its smoke-free portfolio. The company announced its 61st dividend increase in 57 years in August and said its board authorized a $1 billion expansion of its existing share-repurchase program, which now expires on Dec. 31, 2027.
For 2026, Altria now expects adjusted diluted EPS of $5.66 to $5.74, representing growth of 4.5% to 6% from a 2025 base of $5.42. The company had previously forecast growth of 2.5% to 5%.
Smokable products support earnings growth
Chief Financial Officer Heather Newman said the smokable products segment remained Altria’s primary earnings-growth contributor despite continuing economic pressure on adult smokers. She said the overall cost of goods and services has risen about 30% since 2021, while more recent gas-price increases have further constrained discretionary income.
Adjusted operating companies income in the smokable products segment rose 3.9% to $3.1 billion in the third quarter and increased 4.1% to $8.8 billion for the first nine months. Adjusted operating companies income margin was 64.5% in the quarter, up 0.1 percentage point from a year earlier.
Reported domestic cigarette volume declined 2.9% during the quarter and 2.8% over the first nine months. Adjusting for trade-inventory movements, the company estimated that domestic cigarette volume fell about 4% for both periods, compared with an estimated 5% industry decline.
Altria said its pricing realization was 4.4% in the quarter, reflecting the sales mix of Marlboro Cowboy Cut and Basic. Marlboro expanded its share of the premium segment to 60%, up 0.3 share point year over year and 0.4 share point sequentially. Its overall retail share was flat sequentially but down one share point from the year-earlier period as consumers continued moving toward discount brands.
The discount segment grew to 34.1% of the category, up two share points from the prior-year quarter. Basic retail share rose 0.3 share point sequentially and 1.8 share points year over year. Combined, PM USA retail share increased 0.2 share point sequentially and 0.3 share point from a year earlier.
Mancuso said Cowboy Cut is intended to provide value-sensitive smokers with a premium Marlboro option while retaining them within the Marlboro franchise. The product was available in about 100,000 stores, representing roughly 75% of cigarette volume, he said.
on! pouch volumes rise as Helix expands offerings
Nicotine pouches continued to drive growth in the oral tobacco category, which Altria estimated increased 5.5% over the last six months. The nicotine pouch category gained 5.8 share points in the third quarter and represented more than 60% of the overall oral category, according to Mancuso.
Helix’s reported on! shipment volume increased 13.3% to 47.8 million cans in the third quarter, while year-to-date shipments rose 7.7%. on! retail share was 8.3%, up 0.1 share point from a year earlier but down 0.3 share point sequentially.
During the quarter, Helix expanded on! PLUS 12 mg products nationwide across mint, wintergreen and tobacco varieties. It also introduced Blueberry Mint and Mango Pineapple flavor extensions, while Watermelon Mint is set to enter select retail locations in November.
Altria said it had launched a retail trade program earlier in the year that secured premium positioning in stores accounting for approximately 90% of on! volume. The company also held an invitation-only golf event, called the on!vitational, in Palm Beach, Florida, as part of a multiyear brand-building platform.
Financial results for the oral tobacco products segment reflected investments in on! PLUS and lower moist smokeless tobacco volumes. Adjusted operating companies income declined 3.7% to $443 million in the quarter, while reported segment shipment volume fell 4.3%. Growth in on! was more than offset by lower moist smokeless tobacco volume, the company said.
Regulatory focus includes PMTA process and illicit vapor enforcement
Mancuso said Helix and NJOY filed legal action against the Food and Drug Administration during the quarter, asking the court to require an application-review process that meets the 180-day time frame set by Congress. The complaint also seeks permission for products with applications pending beyond that period to remain on the market while the agency develops a new process.
The FDA subsequently announced plans to evaluate changes to its premarket tobacco product application framework, Altria said. Mancuso said the company supports a modernized process that maintains rigorous standards while providing more clarity, predictability and efficiency.
Altria also called for sustained enforcement against illicit e-vapor products. The company estimated there were approximately 20 million adult vapers at the end of September, down 1 million from a year earlier, primarily because of fewer consumers using illicit products.
Regarding NJOY ACE, which was removed from the market because of patent issues, Mancuso said Altria had worked around those issues and plans to return to the e-vapor market. He did not provide timing, saying the company would pursue the opportunity in a “disciplined” manner and seek profitability over time.
Capital returns and ABI earnings
Altria returned more than $6 billion to shareholders in the first nine months, including $5.3 billion in dividends and $735 million in share repurchases. Its quarterly dividend was raised 4.7% in August to $1.11 per share.
The company recorded $191 million in adjusted equity earnings from its stake in Anheuser-Busch InBev during the third quarter, up 21.7% from a year earlier. Altria’s debt-to-EBITDA ratio stood at 1.9 times as of Sept. 30, in line with its target of approximately 2 times.
About Altria Group (NYSE:MO)
Altria Group, Inc is a U.S.-based consumer products company focused primarily on tobacco, nicotine and related products. Through its operating companies, Altria sells cigarettes, cigars, pipe tobacco, oral tobacco and nicotine products, and electronic vapor products.
Altria's principal cigarette business is Philip Morris USA, whose portfolio includes Marlboro, Parliament and Virginia Slims. Its other major brands include Copenhagen and Skoal moist smokeless tobacco, Black & Mild cigars, on! nicotine pouches and NJOY electronic cigarettes.
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