In its first 2025 results teleconference, the Altria tobacco conglomerate performed robust performance, but highlighted unregulated Vape products as a problem for the industry.
Altria, known as Cigarette Manufacturer Marlboro’s mother company, Philip Morris USA, and Black & Mild cigars manufacturer John Middleton, identified the transition from customers to one.
However, the brand said it had to resort to politicians to ensure an repression of unauthorized and unregulated e-vape products that are flooding the market.
In its results teleconference performed earlier this week, Altria announced results that exceeded market expectations and reaffirmed their profit (LPA) forecast for the year.
Although net revenue fell 5.7% in the first quarter compared to the same period last year, totaling US $ 5.2 billion to the quarter ended in March 2025, it exceeded market expectations, which were about $ 4.6 billion.
Similarly, Altria registered an adjusted LPA of $ 1.23 for the first quarter compared to the $ 1.19 expected by the market. The company also confirmed the repurchase of 5.7 million shares in the quarter, adding that it expects a LPA growth rate for the year between 2% and 5% in 2024.
Continues after advertising
“Our highly profitable traditional tobacco business performed well in a challenging environment in the first quarter,” said Billy Gifford, CEO of Altria. “The Femble Products segment had a solid adjusted growth of operating revenue, driven by Marlboro’s force.”
That said, the tobacco industry is changing with changes in consumer behaviors. When adjusted for inventory fluctuations, calendar differences and other external factors, domestic cigarette remittance volumes fell 9%, he added.
Similarly, the remittance volumes of cigars fell 2.9%, he told Altria.
Continues after advertising
In place of these tobacco products are the vapes, which Fortune 500 believes it is used by 2.6 million more consumers compared to last year-bringing the total number of e-rape users to more than 20 million people.
The Richmond, Virginia -based company is subject to Food & Drug Administration decisions (FDA, such as the US Anvisa), but said its work was being harmed by an “flood” of unlawful vapes that are coming to the US from China.
Altria estimates that approximately 60% of the Vapes market – valued at $ 14 million – consists of unauthorized devices, representing concerns for public health.
Continues after advertising
“To deal with the illicit e-rapes issue, we are still focused on defending regulatory reforms to accelerate product authorizations and improve application against illicit actors,” Giford told investors during the teleconference. “We are actively engaging in Congress and key administrative staff to highlight the importance of this issue and we are instituting the new administration and the federal task force established last year to take stronger and coordinated actions.”
Gifford added that consumers are also using unauthorized products because they can purchase flavors that are not currently approved by the FDA.
The FDA won several victories in its battle against illicit vapes that are entering the US.
Continues after advertising
In January, the federal administration seized $ 7 million in illegal electronic cigarettes of Chinese origin after the seizure of products worth $ 76 million discovered in October.
Of course, it would not be a conference teleconference in the first half of 2025 without any mention of tariffs – particularly from a consumer conglomerate such as Altria.
“We will continue to closely monitor the situation of our consumers, including how the economic impact of tariffs can affect their purchase behaviors,” said CFO of Altria, Sal Mancuso.
That said, executives have added that price elasticity is still a lower priority for consumers than factors such as a premium experience and taste.
“Within the highly lucrative premium segment, where smokers buying behavior tends to reflect high levels of brand loyalty, Marlboro maintained its longstanding leadership,” added Mancuso.
Likewise, in relation to e-vapor flavors, Gifford added: “We are certainly seeing consumers under pressure, and we have noticed this for several quarters … It is the cumulative impact of inflation. It is not just a single trimester isolated, it is the cumulative impact over time.”
“And we are seeing… the prices, from the consumer point of view, go up. It is certainly not number one. The flavors are still number one, and the flexibility that [os clientes] They have and the amount of choices they have on the market are number one. But the price is certainly rising and becoming a more prominent factor. ”
2025 Fortune Media IP Limited
