Altria’s third quarter results showed lower profit forecast and revenue. Photo credit: Altria
Altria Group cut the annual profit forecast in its 2023 third-quarter and nine-months results as demand for its core cigarette business declined, with more smokers swapping its higher priced cigarettes for cheaper brands or other alternatives and illicit e-vapor products flooding the market.
The company said it now expects adjusted profit of US$4.91 to US$4.98 per share this year, compared with a previous forecast of US$4.89 to US$5.03 per share.
The company’s overall revenue fell 4.1% year-on-year to US$6.28 billion. Net of excise tax, Altria recorded revenue of US$5.28 billion, down 2.5%. Altria said the drop was in part due to lower net revenues for its smokeable products. In the third quarter, there was a 5.3% decline in net revenue from smokeable products due to decreased shipping volumes and increased promotional investments being somewhat offset by better pricing.
The retail share of Altria's Marlboro brand in the US fell 0.3% to 42.3% from the same quarter last year, mostly as a result of heightened macroeconomic pressures on disposable income and heightened competition.
Nevertheless, Altria c.e.o., Billy Gifford , said in a statement, “Our highly profitable traditional tobacco businesses were resilient in a dynamic operating environment during the third quarter and first nine months, providing fuel for our business transformation and significant cash returns to our shareholders.”
Altria completed its acquisition of NJOY’s e-vapor product portfolio this June in a deal worth approximately US$2.75 billion. The deal included NJOY Ace, the only pod-based vape cleared for the US market by the Food and Drug Administration (FDA). During the third quarter, Altria shipped 7.5 million Ace pods. Following the completion of the Njoy acquisition, Ace pods' retail share in convenience and multi-outlet stores in the US has remained mostly unchanged. Altria expects ACE distribution to reach a total of 70,000 stores by the end of the year.