Altria Narrows EPS Guidance Up as Growth Slows, Buybacks Ease
Altria Group's adjusted profit growth cooled to 2.8% in the quarter even as the tobacco giant raised the floor on its full-year earnings forecast.
Altria Group (MO), the maker of Marlboro cigarettes and owner of the on! nicotine pouch brand, raised the low end of its full-year adjusted earnings guidance even as quarterly profit growth slowed sharply. The company narrowed its 2026 adjusted diluted earnings-per-share range to $5.61–$5.72, up from a prior floor of $5.56, implying growth of 3.5% to 5.5% for the year compared with 2.5% to 5.5% previously.
The upgrade came alongside a deceleration in the underlying numbers. Second-quarter adjusted earnings per share rose 2.8% to $1.48, down from 7.3% growth to $1.32 in the first quarter. Net revenue was essentially flat, up 0.1%, after climbing 3.2% in the prior period. First-half adjusted earnings per share were still up 4.9% to $2.80, ahead of the 4.4% growth Altria posted for all of 2025, but the quarter-over-quarter slowdown left less room for error in the back half.
The divergence between Altria's two core categories widened. Smokeable products, still anchored by Marlboro, expanded adjusted operating-income margin by 0.3 percentage point to 64.8%. Oral tobacco, the smokeless business built around Copenhagen, Skoal and on!, saw margin compress 2 percentage points to 66.7% as net revenue fell 5.3% to $713 million and adjusted operating income dropped 8% to $460 million, on an 8.5% shipment volume decline that was materially worse than the first half's 4.2% drop. Inside that category, oral nicotine pouches took 59.9% of oral tobacco volume, up 8.1 percentage points from a year earlier, as Copenhagen and Skoal both lost share to the newer format.
Cigarettes told a similar story of category erosion paired with price-tier trade-down. Domestic cigarette shipment volume fell 3.2% in the quarter, or 4.5% adjusted for trade inventory, a touch worse than the first half's 2.8% decline. Discount-brand shipments jumped 67.3% while Marlboro shipments fell 7.4%, pushing discount retail share up 2.6 percentage points to 33.8% as Marlboro's category share slipped 1.5 points to 39.5%. Contract-manufactured export volume more than doubled in the quarter, a new disclosure line linked to its guidance for a bigger import/export benefit in the second half.
Capital spending is rising to fund the response. Altria lifted its 2026 capex guidance to $375 million–$450 million from $300 million–$375 million, tied to consolidating manufacturing operations at its U.S. Smokeless Tobacco Company subsidiary. That consolidation is already showing up in charges: the company booked $88 million in asset-impairment and exit costs in the quarter and $94 million for the first half under its Optimize & Accelerate initiative, whose total estimated pre-tax cost had been raised to roughly $175 million as of the fourth quarter of 2025.
Altria pulled back on share repurchases as it absorbed those costs, buying back $55 million of stock in the quarter, down from $280 million in the first quarter, leaving $665 million available under its $2 billion program. The reported effective tax rate fell to 21.5% in the quarter, 2.2 percentage points lower than a year earlier, helping cushion the earnings line even as revenue growth stalled.
On the product side, Altria's Helix unit resumed shipments of its 12-milligram on! PLUS pouch in three states during the quarter after the product had been under Food and Drug Administration review as of the previous release, with national expansion planned for the third quarter and new flavors due in the fourth. The rollout gives Altria a fresh growth lever in oral nicotine just as its established smokeless brands cede share to newer entrants, a reminder that the company's next quarters will hinge on execution in categories still shifting beneath it.