Marlboro shipment volumes fell 7.4% and discount cigarette volumes surged as inflation and higher living costs pressured consumers, even as Altria raised its 2026 adjusted earnings outlook.
Altria Group shares fell sharply after the tobacco company posted a rare second-quarter earnings miss and signaled that inflation and broader economic pressure are pushing U.S. smokers away from premium brands such as Marlboro and toward cheaper cigarettes. Adjusted earnings came in at $1.48 per share, below the $1.50 LSEG consensus estimate, while net revenue after excise taxes rose 1.2% to $5.36 billion and quarterly operating income fell 2.9% to $3.14 billion. In smokable products, net revenue rose 0.7%, but domestic cigarette shipment volumes declined 3.2% and Marlboro volumes dropped 7.4%, underscoring weakening pricing power in the premium segment. Altria said higher living costs were straining discretionary spending, prompting it to lean on both its premium Cowboy Cut rollout and discount brands such as Basic, whose shipment volumes jumped 67.3%. The company also faced pressure in smoke-free products: Oral Tobacco Products revenue fell 5.3%, shipment volumes dropped 8.5%, and On! nicotine pouch volumes declined 4.2% amid intensifying competition from Philip Morris International's Zyn. Altria said NJOY ACE vapes have been off the U.S. market since 2025 because of a patent-related import ban, while Helix plans fourth-quarter flavor extensions for some On! products. Despite the weak quarter, Altria raised its full-year 2026 adjusted earnings guidance to $5.61 to $5.72 per share from $5.56 to $5.72 and had $2.37 billion in cash and equivalents as of June 30.