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    MO
    Earnings call· Jun 2026(Q2 FY26)

    ALTRIA GROUP Q2 FY26 earnings call MO

    Jul 30, 2026 Source

    Executive summary

    Altria Group Q2 FY26 — Narrowed EPS Guidance on Strong First Half Performance

    Altria delivered strong first-half results, driven by robust smokable products performance and the expansion of its smoke-free portfolio, particularly on PLUS. The company narrowed its full-year adjusted EPS guidance, reflecting confidence in its strategy amidst persistent consumer economic pressures and an evolving regulatory landscape for e-vapor and nicotine pouches. Management emphasized disciplined execution and strategic investments in both traditional and smoke-free categories.

    Highlights

    5

    • Adjusted diluted EPS grew by 4.9% to $2.80 in the first half of 2026.

    • Smokable products adjusted OCI grew by 4.2% to $5.7 billion in the first half.

    • on retail share reached 8.6%, up 0.8 share points sequentially, driven by on PLUS.

    • PM USA total retail share expanded 0.1 share point sequentially and 0.3 share points year-over-year.

    • ABI adjusted equity earnings increased 21.5% versus the prior year to $158 million.

    Concerns

    4

    • on reported shipment volume was down 4.2% versus the prior year due to trade inventory movements.

    • Marlboro's overall retail share declined 1.5 share points versus the year-ago period.

    • Oral Tobacco Products segment adjusted OCI decreased by 8% in the second quarter.

    • Total segment reported shipment volume decreased 8.5% for the second quarter due to lower MST volumes.

    Guidance & targets

    1
    CategoryTargetConfidence
    Adjusted diluted EPS
    $5.61 to $5.72
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Smokable Products
    Robust adjusted OCI growth driven by strong Marlboro price realization and strategic contribution from Basic. Volume declines moderated, but Marlboro's overall share was impacted by trade-down to discount.
    Adjusted OCI: $3 billionAdjusted OCI growth: 2.4% YoYAdjusted OCI margin (H1): 64.9%Reported domestic cigarette volumes decline: 3.2% YoYAdjusted domestic cigarette volumes decline: 4.5% YoYDiscount retail share growth: 2.6 share pointsMarlboro overall retail share decline: 1.5 share points YoYMarlboro premium share: 59.6%Basic retail share expansion: 0.3 sequentially, 2.3 share points YoYPM USA total retail share expansion: 0.1 sequentially, 0.3 year-over-yearSmokable price realization: 4.5%Middleton reported shipment volume growth: 5% YoY
    		———64.8%
    Oral Tobacco Products
    Segment performance impacted by difficult prior-year comparisons and strategic investments in on PLUS. Growth in on was offset by lower MST volumes. Retail share remained stable due to on growth and MST brand resiliency.
    Adjusted OCI decrease: 8% YoYAdjusted OCI margin (H1): 67%Total segment reported shipment volume decrease: 8.5% YoYAdjusted total segment shipment volume decline: 2% YoYRetail share: 29%on reported shipment volume: 49.9 million canson reported shipment volume decrease: 4.2% YoYon retail share: 8.6%on retail share increase: 0.8 share points sequentially, 0.3 share points YoY
    		———66.7%
    ABI (Equity Earnings)
    Adjusted equity earnings from the ABI stake increased significantly year-over-year.
    		—21.5%—$158 million

    Operational metrics

    28
    Adjusted diluted EPS growth
    4.9%YoY
    H1 FY26

    Growth from a base of $5.42 in 2025.

    Adjusted diluted EPS
    $1.482.8% YoY growth
    Q2 FY26

    Strong second quarter performance.

    Smokable products adjusted OCI growth
    2.4%YoY
    Q2 FY26

    Key contributor to earnings.

    Smokable products adjusted OCI
    $3 billion
    Q2 FY26

    Robust performance.

    Smokable products adjusted OCI margin
    64.8%
    Q2 FY26

    Expanded margin.

    Domestic cigarette volumes decline (reported)
    3.2%
    Q2 FY26

    Decline continued to moderate.

    Domestic cigarette volumes decline (adjusted for trade inventory)
    4.5%
    Q2 FY26

    Estimated decline when adjusted for trade inventory movements.

    Industry domestic cigarette volumes decline (adjusted for trade inventory)
    5%
    Q2 FY26

    Marking the fourth consecutive quarter of moderated declines.

    Discount retail share growth
    2.6
    Q2 FY26

    Driven by persistent discretionary income pressures among low-income consumers.

    Marlboro overall retail share decline
    1.5YoY
    Q2 FY26

    Impacted by trade down dynamics.

    Marlboro premium share
    59.6%unchanged vs prior year, up 0.1 sequentially
    Q2 FY26

    Maintained long-standing leadership in the profitable premium segment.

    Basic retail share expansion
    0.3sequentially
    Q2 FY26

    Expanded by 2.3 share points year-over-year, supporting PM USA's portfolio strategy.

    Smokable price realization
    4.5%
    Q2 FY26

    Driven by strong net pricing for Marlboro, partially offset by mix impact of Basic volume growth.

    Middleton reported shipment volume growth
    5%YoY
    Q2 FY26

    Significantly outperformed the large mass cigar industry, which was down 6.4%.

    Oral Tobacco Products adjusted OCI decrease
    8%YoY
    Q2 FY26

    Impacted by difficult prior year comparison and strategic investment in on PLUS introductory trial offers.

    Oral Tobacco Products adjusted OCI margin
    66.7%
    Q2 FY26

    Remained strong.

    Oral Tobacco Products total segment reported shipment volume decrease
    8.5%YoY
    Q2 FY26

    Growth in on was more than offset by lower MST volumes.

    Oral Tobacco Products total segment adjusted shipment volume decline
    2%
    Q2 FY26

    Estimated decline when adjusted for trade inventory movements.

    Oral Tobacco Products retail share
    29%stable sequentially
    Q2 FY26

    Reflecting the growth of on and resiliency of MST brands.

    on retail share
    8.6%up 0.8 share points sequentially, up 0.3 share points YoY
    Q2 FY26

    Driven by the introduction of on PLUS.

    Dividends paid
    $3.6 billion
    H1 FY26

    Part of significant value returned to shareholders.

    Shares repurchased
    5.3 million
    H1 FY26

    For $335 million.

    Share repurchase program remaining authorization
    $665 million
    Q2 FY26

    Remaining in current program.

    Debt-to-EBITDA ratio
    1.9x
    Q2 FY26

    In line with target of approximately 2x.

    Nicotine pouch category growth
    6%
    past 6 months

    Estimated growth in the oral tobacco category.

    Nicotine pouch category share of total oral category
    60%up 8.1 share points
    Q2 FY26

    Category continues to expand.

    on PLUS store count
    120,000
    Q2 FY26

    Expanded distribution for on PLUS.

    Estimated adult vapors
    20 millionunchanged from a year ago
    end of June

    Suggests moderating growth trajectory of illicit e-vapor.

    Industry KPIs

    9
    MetricValueDetails
    Net price realization4.5%%
    Cigarette category share59.6%%
    Cigarette shipment volume3.2%%
    Illicit trade enforcement$250 millionUSD
    Smoke free market footprint120,000stores
    Smoke free consumer user count20 millionadult vapors
    Regulatory authorization pipelineSupplemental PMTA submitted
    Smoke free reduced risk shipment volumes49.9 millioncans
    Nicotine pouch oral tobacco category dynamics6%%

    Product announcements

    3
    ProductTypeDetails
    on PLUS 12-milligramexpansion
    on PLUS flavor extensions (Blueberry Mint, Mango Pineapple)launch
    Marlboro Cowboy Cutlaunch

    Risks & headwinds

    3
    Consumer economic pressure

    Persistent discretionary income pressures, especially among low-income consumers; elevated gas prices and inflation exceeding overall wage growth.

    Mitigation: PM USA's total portfolio approach, including Basic and Marlboro Cowboy Cut, to engage value-sensitive consumers and capture share that would otherwise be lost to competitive discount brands.

    Illicit e-vapor products

    Federal seizures totaling more than $250 million; estimated 20 million adult vapors, essentially unchanged YoY, with disposable e-vapor consumers declining modestly.

    Mitigation: Increased enforcement activity, including supply-related disruptions at the border, helping slow demand for illicit products. FDA's updated enforcement priorities are a positive step.

    Trade inventory movementsQ2 FY26

    on reported shipment volume down 4.2% YoY; Oral Tobacco Products segment reported shipment volume down 8.5% YoY.

    Mitigation: Management expects export volume and related tax refunds to be higher in the second half of the year with a more balanced benefit across Q3 and Q4.

    What to watch in Q3 FY26

    5

    on PLUS 12mg and flavor extension impact

    next quarter
    Currenton retail share 8.6%, up 0.8 sequentially
    TargetContinued share gains and consumer adoption for on PLUS

    Why it matters

    Verifying the success of new product launches and expansions is crucial for the growth trajectory of Altria's smoke-free portfolio.

    In the second quarter, Helix resumed shipments of on PLUS 12-milligram in 3 flavors in Florida, North Carolina and Texas with a national expansion planned for the third quarter. Helix also plans to introduce flavor extensions across 6, 9 and 12-milligram strengths, beginning with blueberry Mint and mango pineapple in the fourth quarter.

    Q&A highlights

    5

    Why is the low end of guidance below first-half performance, given anticipated benefits from duty drawback and new product launches like on PLUS and Cowboy Cut? Are investments stepping up in the second half?

    Management noted that the timing of benefits played out differently than initially expected. They highlighted continued consumer pressure due to elevated gas prices and inflation, and confirmed increased investment for the national expansion of on PLUS 12mg and flavor extensions. They expressed satisfaction with narrowing guidance despite these factors.

    “As you go into the second half of the year. I think it's important to keep an eye on the financial health of the consumer. The consumer remains under pressure, gas prices and inflation remain elevated, driven primarily by the uncertainty and the geopolitical climate that they are living in today. So -- and then I think you are right to point out. We talked about national expansion of the 12-milligram on PLUS, we've talked about flavor -- introduction of flavor extensions across the portfolio. And yes, that will require a level of investment.”

    asked by Unknown Analyst · answered by Salvatore Mancuso

    2 min read6 chapters

    Detailed Narrative

    01

    Smoke-Free Portfolio Expansion and Performance

    Helix expanded on PLUS to 120,000 stores nationwide, driving on's retail share to 8.6%, up 0.8 share points sequentially. The company plans to introduce on PLUS 12-milligram in 3 flavors nationally in Q3 and flavor extensions (blueberry Mint and mango pineapple) across 6, 9, and 12-milligram strengths in Q4. Early data suggests on PLUS resonates with consumers, driving incremental volume and share, supported by encouraging repeat purchase rates and strategic marketing investments.

    02

    Traditional Tobacco Business Strength

    PM USA advanced its data-driven total portfolio approach, with Marlboro Cowboy Cut generating strong interest among premium smokers and Basic gaining traction in discount. Marlboro maintained its leadership in the premium segment with 59.6% share, while Basic's retail share expanded by 0.3 sequentially and 2.3 share points year-over-year. This balanced approach contributed to PM USA's total retail share expansion of 0.1 share point sequentially and 0.3 year-over-year, supporting long-term profitability.

    03

    Evolving Regulatory Environment and Illicit Products

    The FDA's updated enforcement priorities for e-vapor and nicotine pouch products are viewed as a positive step towards regulatory clarity. Federal seizures of illicit products totaled over $250 million during the quarter, and illicit-driven e-vapor growth is beginning to moderate📎. Altria believes increased enforcement and a more efficient authorization process are critical for a level playing field and expanding access to regulated, high-quality smoke-free products for adult consumers.

    04

    Consumer Dynamics and Economic Pressures

    Economic pressure on adult smokers continues to impact cigarette industry dynamics, with persistent discretionary income pressures driving growth in the discount segment. This led to Marlboro's overall retail share decline of 1.5 share points. However, the decline in smokable volumes moderated, with reported domestic cigarette volumes down 3.2% in Q2, partly due to reduced cross-category movement between cigarettes and illicit flavored disposable e-vapor products.

    05

    Shareholder Returns and Financial Position

    Altria returned nearly $3.9 billion to shareholders in the first half through dividends and share repurchases. The company paid approximately $3.6 billion in dividends and repurchased 5.3 million shares for $335 million. At the end of Q2, $665 million remained in the current share repurchase program. The balance sheet remains strong with a debt-to-EBITDA ratio of 1.9x, in line with the target of approximately 2x.

    06

    ABI Investment Performance

    Altria recorded $158 million in adjusted equity earnings from its ABI stake in the second quarter, representing a 21.5% increase versus the prior year. The company continues to view its ABI stake as a financial investment aimed at maximizing long-term value for shareholders.

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