A look at some of the headwinds faced by Altria (MO) in Q1 2025

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Tuesday. The stock has gained over 14% in the past three months. The company saw its revenues decline in its most recent quarter mainly due to lower revenues from smokeable products. It also faced headwinds in the e-vapor category while the oral tobacco products segment benefited from gains in on! nicotine pouches.

Q1 performance

In the first quarter of 2025, Altria’s revenues decreased nearly 6% year-over-year to $5.3 billion, driven by lower revenues in the smokeable products segment. Adjusted earnings per share rose 6% to $1.23, helped by higher adjusted operating income.  

E-vapor headwinds and momentum in on!

The e-vapor category continues to be plagued by illicit disposable products, which are currently estimated to make up 60% of the category. The growth of illicit products has hurt legitimate e-vapor manufacturers like NJOY. In Q1, NJOY consumables shipment volume increased nearly 24% YoY to 13.5 million units while devices shipment volume decreased 70% to 0.3 million units. NJOY has also been impacted by the ITC’s cease-and-desist orders against NJOY ACE, which has led to the discontinuation of ACE wholesale shipments and importation.

In Q1, the oral tobacco products segment saw a slight increase in revenues, helped by higher pricing. Oral nicotine pouches, which grew 8.7 share points during the quarter, currently make up around half of the oral tobacco category. On!’s share of the nicotine pouch category grew to 17.9% in Q1. During the quarter, on! maintained its momentum at retail, growing its share of the oral tobacco category to 8.8%.

Meanwhile, the smokeable products segment saw revenues decline by nearly 6% in Q1, mainly due to lower shipment volume, partly offset by higher pricing. Domestic cigarette shipment volume fell nearly 14%, due to industry declines caused by the growth of illicit e-vapor products and continued pressures on consumers’ discretionary incomes. Marlboro retail share of the total cigarette category stood at 41%.

Outlook

For the full year of 2025, Altria expects adjusted EPS to range between $5.30-5.45, representing a growth of 2-5% YoY.