One does rather wish Altria Group (MO 5.34%) would find a new hobby. The recent results, announced yesterday, were, shall we say, less than thrilling. The market, predictably, responded with a touch of pique, and the share price dipped by a shade over 5%. Honestly, it’s all terribly tiresome.
Losing Ground, Darling
It appears the American public is developing a distinct lack of enthusiasm for cigarettes. Domestic shipment volumes declined by nearly 8% in the last quarter. One can hardly blame them, really. It’s a frightfully unhealthy habit. But unhealthy habits, unfortunately, are often the most profitable.
The real tragedy, of course, is the dwindling dominance of Marlboro. A market share of 39.8% is positively plebeian. A drop of 1.5 percentage points year-over-year suggests a rather alarming lack of consumer loyalty. One begins to suspect they’re simply branching out.
And the shift towards oral tobacco? Altria is, quite simply, failing to keep pace. Shipment volumes down 6.3%, and a particularly nasty tumble of 5.3 percentage points in the nicotine pouch category for their ‘on!’ brand. One suspects a rebranding exercise is in order, though frankly, one doubts it will make a whit of difference.
Profits, For Now
The clever chaps at Altria managed to mitigate the damage with some judicious price increases, resulting in revenue that declined by less than 1%. A temporary reprieve, naturally. One can’t simply charge more for something nobody wants, can one?
Adjusted earnings per share remained stubbornly flat at $1.30, aided by some rather aggressive stock buybacks. A bit like rearranging the deckchairs on the Titanic, really. But one mustn’t look a gift horse in the mouth.
Management, with characteristic optimism, anticipates adjusted earnings growth of 2.5% to 5.5% in 2026, reaching a range of $5.56 to $5.72 per share. Driven, they claim, by cost-cutting initiatives. One suspects they’ll need rather more than that to turn things around. Still, one wishes them luck. They’ll need it.
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2026-01-30 01:24