Oral tobacco products continue to be a growth driver for Altria (MO)

Shares of Altria Group, Inc. (NYSE: MO) stayed green on Tuesday. The stock has gained 19% year-to-date. The tobacco company saw revenues decline in the second quarter of 2025, weighed down by weakness in smokeable products. However, growth in oral tobacco products helped to slightly counteract this decrease.

Q2 numbers

In Q2 2025, Altria’s revenues decreased nearly 2% year-over-year to $6.1 billion, mainly due to lower revenues in the smokeable products segment, partly offset by higher revenues in the oral tobacco products segment. Earnings per share, on an adjusted basis, grew over 8% to $1.44 in the quarter.  

Oral tobacco strength and smokeables weakness

In Q2, revenues in the oral tobacco products segment grew nearly 6% YoY to $753 million, driven mainly by higher pricing, partly offset by lower shipment volume. Domestic shipment volume was down 1%, mainly due to retail share losses. Oral nicotine pouches were the main growth driver of this segment, with the on! brand in particular delivering a strong performance.

In the US, the nicotine pouch category now makes up 52% of the oral tobacco category. Total US oral tobacco category share for on! nicotine pouches stood at 8.7%, up 0.7 share points from last year. On!’s shipment volume increased 26.5% YoY to 52.1 million cans in the quarter.

On the other hand, the smokeable products segment saw revenues decline by nearly 3% YoY to $5.3 billion, driven mainly by lower shipment volume. Domestic cigarette shipment volume fell 10.2%, due to headwinds from the growth in illicit disposable e-vapor products, discretionary income pressures on consumers, and retail share losses.

Marlboro’s retail share of the total cigarette category dropped 0.9 share points to 41% compared to last year. The brand’s share of the premium segment grew 0.2 share points to 59.5% in Q2.

Outlook

For the full year of 2025, Altria expects adjusted EPS to range between $5.35-5.45, representing a growth of 3-5% YoY.