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Altria (MO): A look at the progress in smoke-free and challenges in smokeables

Shares of Altria Group, Inc. (NYSE: MO) remained green on Monday. The stock has gained 9% over the past three months. MO saw overall revenue dip slightly during its most recent quarter, due to lower revenues from smokeable products, while earnings saw strong growth, supported by higher operating companies income (OCI). The company continues to […]

$MO November 18, 2024 2 min read
NYSE
$MO · Earnings

Shares of Altria Group, Inc. (NYSE: MO) remained green on Monday. The stock has gained 9% over the past three months. MO saw overall revenue dip slightly during its most recent quarter, due to lower revenues from smokeable products, while earnings saw strong growth, supported by higher operating companies income (OCI). The company continues to […]

· November 18, 2024

Shares of Altria Group, Inc. (NYSE: MO) remained green on Monday. The stock has gained 9% over the past three months. MO saw overall revenue dip slightly during its most recent quarter, due to lower revenues from smokeable products, while earnings saw strong growth, supported by higher operating companies income (OCI). The company continues to make progress in its smoke-free business even as it faces challenges within the smokeable products division. Here are a few points of note:

In the e-vapor category, Altria is optimistic about the potential of NJOY. In the third quarter of 2024, NJOY consumables shipment volume increased 15.6% year-over-year to 10.4 million units. NJOY devices shipment volume nearly tripled YoY to 1.1 million units. NJOY retail share of consumables in the US multi-outlet and convenience channel increased to 6.2% in Q3.

NJOY

Oral tobacco products

Revenues from oral tobacco products grew over 5% to $722 million in Q3, driven by higher pricing and shipment volume. OCI increased 2%. Domestic shipment volume grew 1.2% in the quarter. Retail share for oral tobacco products stood at 37.6%, as declines in share for moist smokeless tobacco (MST) products were partly offset by share growth in oral nicotine pouches.

Oral nicotine pouches now account for 43.9% of the oral tobacco category in the US, reflecting a growth of 11.4 share points YoY. Total US oral tobacco category share for on! nicotine pouches grew to 8.9%. In Q3, shipment volume for on! nicotine pouches grew 46% YoY.

Smokeable products

Altria continues to see challenges in its smokeable products segment as cigarette volumes continue to decline. Inflationary pressures are impacting smokers’ discretionary income which are weighing on volumes.

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In Q3, revenues in smokeable products fell slightly to $5.54 billion, due to lower shipment volume, partly offset by higher pricing. OCI increased 7.1%, driven mainly by higher pricing. Domestic cigarette shipment volume fell 8.6% in the quarter, mainly due to the industry’s decline rate and retail share losses.

Marlboro displayed resilience as its share of the premium segment rose 0.3 share points YoY to 59.3% in the quarter. The brand’s retail share of the total cigarette category fell 0.6 share points to 41.7% YoY in Q3.

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