Altria misses quarterly profit estimates as premium cigarette demand weakens

July 30 (Reuters) – Marlboro maker Altria Group fell short of second-quarter earnings estimates as macroeconomic uncertainty weighed on spending patterns, hurting demand for its premium cigarettes and nicotine pouches.

Altria’s shares were down nearly 7% on Thursday as shipment volumes dropped for its premium Marlboro brand, as well as for its On! nicotine pouches.

Altria executives reiterated on a post-earnings call that higher living costs, triggered by the Middle East conflict, were weighing on discretionary spending, prompting some smokers to seek lower-priced cigarette options.

As the gap between lower- and higher-income consumers grows in the U.S., Altria has tried to capture shoppers on both sides of the spectrum, broadening the rollout of premium cigarette brand Cowboy Cut and banking on discount brand Basic to capture lower-income shoppers.

In the second quarter, shipment volumes for discount cigarettes jumped 67.3%. Volumes also fell 7.4% in the Marlboro category, but the decline was smaller than the 11.4% drop reported a year ago.

Cigarette price increases were less effective than expected in the quarter, BTIG analysts said in a note, adding that pricing power in the category could be a cause for concern for investors.

Altria has also focused on alternatives to traditional cigarettes like its peers and has banked on growing demand for On! nicotine pouches and NJOY vapes in the U.S.

However, its NJOY ACE vapes have remained absent from the U.S. market since 2025, following a patent-related import ban.

At the same time, shipment volumes for its On! nicotine pouches fell 4.2% in the second quarter as competition ramped up in the category.

Rival Philip Morris said last week that it would ramp up investment in its Zyn nicotine pouches, after higher cigarette demand helped the company top quarterly results estimates.

Altria also said that its subsidiary, Helix, which manufactures On! nicotine pouches, plans to introduce flavor extensions for some pouches in the fourth quarter.

Altria’s quarterly adjusted earnings per share of $1.48 missed estimates of $1.50 per share, according to data compiled by LSEG. Its revenue net of excise taxes rose 1.2% to $5.36 billion.

The company expects full-year earnings per share of $5.61 to $5.72, compared with its earlier target of $5.56 to $5.72.

(Reporting by Shania S Thomas and Juveria Tabassum in Bengaluru; Editing by Maju Samuel)