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    MO
    Earnings call· Mar 2026(Q1 FY26)

    ALTRIA GROUP Q1 FY26 earnings call MO

    Apr 30, 2026 Source

    Executive summary

    Altria Group Q1 FY26 — Strong EPS Growth Driven by Smokeable Performance and on! PLUS Expansion

    Altria delivered a strong first quarter, exceeding expectations with robust adjusted EPS growth, primarily driven by its resilient smokeable products segment and strategic pricing. The company reaffirmed its full-year EPS guidance, balancing strong initial performance with ongoing macroeconomic uncertainties and increased investments in its smoke-free portfolio, particularly the national expansion of on! PLUS and its regulatory pipeline. Management highlighted the moderation of cross-category movement from cigarettes to e-vapor and the continued pressure on price-sensitive consumers.

    Highlights

    5

    • Adjusted diluted EPS grew by 7.3% in Q1 FY26.

    • Smokeable products segment adjusted OCI grew by 6.3%, with margins expanding to 65.1%.

    • Marlboro expanded its share of the premium segment to 59.5%, up 0.1 share point year-over-year.

    • on! reported shipment volume grew nearly 18% to over 46 million cans in Q1 FY26.

    • Total PM USA retail share grew 0.4 share points year-over-year, demonstrating effective total portfolio strategy.

    Concerns

    4

    • on! and on! PLUS total oral tobacco category share declined 0.8 share points year-over-year to 7.8%.

    • Marlboro's overall retail share declined 1.4 share points year-over-year due to trade-down to discount segment.

    • Oral Tobacco Products segment adjusted OCI margins decreased 1.8 percentage points to 67.4% due to marketing investments and product mix.

    • Oral Tobacco Products segment volumes declined by approximately 8.5% when adjusted for trade inventory movements.

    Guidance & targets

    1
    CategoryTargetConfidence
    Full year adjusted diluted EPS
    $5.56 to $5.72
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Smokeable Products
    Strong financial performance driven by pricing and volume moderation. Marlboro strengthened its position in the premium segment, while Basic captured share in the discount segment.
    Adjusted OCI margin: 65.1%Net price realization: 6.3%Reported domestic cigarette volume decline: 2.4%Adjusted domestic cigarette shipment volume decline: 4%Marlboro share of premium segment: 59.5%Marlboro share of premium segment YoY change: +0.1 share pointMarlboro share of premium segment sequential change: +0.2 share pointBasic retail share YoY growth: +2.4 share pointsBasic retail share sequential growth: +0.5 share pointsTotal PM USA retail share YoY growth: +0.4 share pointsTotal PM USA retail share sequential growth: +0.1 share pointCigar reported shipment volume decline: 0.2%
    		———6.3% adjusted OCI growth
    Oral Tobacco Products
    Delivered strong adjusted OCI despite margin pressure from marketing investments and product mix. on! showed strong shipment volume growth, but overall segment volume declined due to lower MST volumes and trade inventory impacts.
    Adjusted OCI margin: 67.4%Adjusted OCI margin YoY change: -1.8 percentage pointsTotal segment reported shipment volume decline: 3.1%Adjusted segment volume decline: 8.5%on! reported shipment volume growth: 18%on! reported shipment volume: 46M+ canson! and on! PLUS total oral tobacco category share: 7.8%on! and on! PLUS total oral tobacco category share YoY change: -0.8 share pointson! and on! PLUS total oral tobacco category share sequential change: +0.2 share points
    		———$400M+ adjusted OCI

    Operational metrics

    15
    Adjusted diluted EPS growth
    7.3%YoY growth
    Q1 FY26

    Strong start to the year.

    Adjusted equity earnings from ABI
    $160Mup 9.6% versus prior year
    Q1 FY26

    Altria views its ABI stake as a financial investment.

    Dividends paid
    $1.8B
    Q1 FY26

    Part of significant returns to shareholders.

    Share repurchases
    $280M
    Q1 FY26

    Part of significant returns to shareholders.

    Remaining share repurchase authorization
    $72M
    as of Q1 FY26 end

    Under current share repurchase program.

    Debt retired
    $1B+
    Q1 FY26

    Retired debt that matured in February.

    Net debt to EBITDA ratio
    1.9x
    as of March 31

    Maintaining a strong balance sheet.

    Adult vapers
    20.5Min line with year ago period
    end of March

    Estimated number of adult vapers.

    on! PLUS store availability
    100,000 stores
    end of Q1 FY26

    National expansion of on! PLUS.

    Helix trade program coverage
    90%
    Q1 FY26

    Secured premium retail positioning.

    Nicotine pouch category growth
    9.1 share points
    Q1 FY26

    Nicotine pouch category now represents over 58% of total oral tobacco.

    Total oral tobacco industry volume growth
    9.5%
    past 6 months

    Driven by oral nicotine pouches.

    Oral tobacco category share
    58%
    Q1 FY26

    Nicotine pouch category now represents over 58% of total oral tobacco.

    Domestic cigarette industry volume decline
    5%adjusted for trade inventory movements
    Q1 FY26

    Marking the fourth consecutive quarter of sequential year-over-year moderation.

    Discount segment retail share growth
    2.4 share pointsYoY
    Q1 FY26

    Driven by macroeconomic pressures on consumers.

    Industry KPIs

    10
    MetricValueDetails
    Net price realization6.3%%
    Cigarette category share59.5%%
    Cigarette shipment volume2.4% decline%
    Illicit trade enforcement70%%
    Smoke free market footprint100,000 stores
    Smoke free consumer user count20.5M
    Regulatory authorization pipeline—
    Smoke free revenue and profitability—
    Smoke free reduced risk shipment volumes18% growth%
    Nicotine pouch oral tobacco category dynamics9.1 share points growth

    Product announcements

    1
    ProductTypeDetails
    Marlboro Cowboy Cutexpansion

    Risks & headwinds

    4
    Macroeconomic environment and consumer pressureOngoing

    Elevated everyday expenses and higher gas prices later in the quarter continued to weigh on discretionary income among more price-sensitive adult smokers.

    Mitigation: PM USA's total portfolio strategy (Marlboro, Basic, Cowboy Cut) to address trade-down dynamics; revenue growth management tools.

    Prevalence of illicit flavored disposable e-vapor productsOngoing

    Approximately 70% of e-vapor volume is illicit flavor disposables.

    Mitigation: Increased enforcement activity; pushing FDA for more efficient and predictable authorization process for compliant products.

    Regulatory constraints on e-vapor productsOngoing

    Limited number of FDA-authorized products.

    Mitigation: Advocating for a more efficient and predictable FDA authorization process that supports responsible innovation.

    Competitive environment in oral tobaccoQ1 FY26

    on! and on! PLUS together represented 7.8% of the total oral tobacco category, down 0.8 share points year-over-year.

    Mitigation: National expansion of on! PLUS, new retail trade program to increase visibility and secure incremental fixture space, marketing efforts.

    Q&A highlights

    6

    Why was Q1 stronger than expected, and why wasn't guidance raised or narrowed given the strong start?

    Q1 strength was due to stronger volume performance in smokeable, driven by moderation in cross-category movement. Guidance was reaffirmed due to macroeconomic uncertainty, rising gas prices, and potential short-term nature of tax refund benefits. Growth is now expected to be more balanced between H1 and H2.

    “We thought it was prudent to reaffirm guidance. We're a quarter into the year. Obviously, the macroeconomic environment remains challenging and uncertain.”

    asked by Mirza Faham Baig · answered by Salvatore Mancuso

    2 min read6 chapters

    Detailed Narrative

    01

    Smokeable Products Performance

    The smokeable products segment delivered strong financial performance with adjusted OCI growth of 6.3% and adjusted OCI margins expanding to 65.1%. This was supported by solid net price realization of 6.3%. Domestic cigarette volumes declined by 2.4% reported, or 4% adjusted for trade inventory, showing moderation in decline. Marlboro strengthened its premium segment share to 59.5%, up 0.1 share point year-over-year, while Basic captured share in the discount segment, contributing to a 0.4 share point increase in total PM USA retail share year-over-year.

    02

    on! PLUS National Expansion and Regulatory Efforts

    on! PLUS began nationwide shipping in March and is now available in approximately 100,000 stores, covering 85% of nicotine pouch category volume. It is the first product authorized under the FDA's pilot program for streamlining PMTA reviews. Altria has submitted applications for 6 additional on! PLUS varieties across 3 nicotine strengths, believing the science supports authorization within the 180-day statutory timeline.

    03

    E-Vapor Category Dynamics and Enforcement

    The e-vapor category is showing signs of moderation in illicit flavored disposable product growth, attributed to increased enforcement activity and supply disruption. The estimated number of adult vapers remained stable at 20.5 million, with a modest decline in disposable e-vapor consumers. Altria sees a clear pathway to a compliant legal marketplace through efficient FDA authorization and sustained enforcement.

    04

    Macroeconomic Headwinds and Consumer Behavior

    Elevated everyday expenses and higher gas prices continue to weigh on discretionary income for price-sensitive adult smokers, driving growth in the discount cigarette segment. While higher-than-normal tax refunds provided some short-term relief, the company is closely monitoring consumer economic conditions. Altria's total portfolio strategy, including Basic and the upcoming Cowboy Cut, aims to manage these trade-down dynamics.

    05

    Oral Tobacco Products Segment

    The oral tobacco products segment delivered over $400 million in adjusted OCI, with margins at 67.4%, down 1.8 percentage points due to Helix marketing investments and product mix. Total segment reported shipment volume decreased 3.1%, with on! growth offset by lower MST volumes. Adjusted for trade inventory, segment volumes declined approximately 8.5%.

    06

    Capital Allocation and Balance Sheet

    Altria returned approximately $1.8 billion in dividends and repurchased 4.5 million shares for $280 million in Q1. The company retired over $1 billion of debt, maintaining a strong debt-to-EBITDA ratio of 1.9x, in line with its target.

    AI-generated summary of the company’s earnings call. Not investment advice.