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PM USA reports slip in cigarette shipments

05 Feb 2018. Philip Morris USA has said it shipped 8.9 per cent fewer cigarettes in the fourth quarter, with volumes of its flagship Marlboro sticks, other premium-brand cigarettes and discount brands all recording sharp slips in fourth-quarter, and full-year, results.

According to the company, 8.8 per cent fewer Marlboro sticks were shipped in the fourth quarter and full-year shipment volume for the flagship brand was down 5.1 per cent in 2017 compared the previous 12 months. The Altria-owned company shipped 99.974 billion Marlboro sticks in 2017, down on the 105.297 billion sticks shipped in 2016.

The company reported volumes of its other premium-brand cigarettes fell 8.1 per cent in the fourth quarter and 6.5 per cent over the full year. Volumes of the company's discount cigarettes also slipped, with 10.665 billion sticks shipped in 2017, down 5.2 per cent on the 11.251 billion discount sticks shipped in 2016. Discount sticks took the biggest dive in the fourth-quarter results, with 10 per cent shaved off the comparable 2016 volume.

The company's total cigarette shipments for the fourth quarter were down 8.9 per cent and full year cigarette shipments, at 116.606 billion, were down 5.1 per cent on the 122.93 billion sticks shipped in the 12 months through December 2016.

The company's reported net revenues for smokeable products in 2017, which includes cigars, were down 0.9 per cent to USD 22.636 billion (EUR 18.17 billion).

Cigar shipments in 2017, at 1.542 billion units, were up 9.9 per cent, driven by strong performance in the black & mild category, where fourth-quarter volumes were up 8.5 per cent and full-year volume was up 10.7 per cent. PM USA's other cigars category took a hit, with 40 per cent fewer units shipped in the fourth quarter and 37.5 per cent fewer over the full year.

PM USA said fourth quarter results were impacted on by industry decline and trade inventory movements. Adjusting for trade inventory movements, the company said its total cigarette shipments in Q4 were down 6.5 per cent.

Of the full year, the company said, “the smokeable products segment’s reported domestic cigarettes shipment volume decreased by 5.1 per cent, primarily driven by the industry’s rate of decline, retail share declines and one fewer shipping day. When adjusted for calendar differences, PM USA’s domestic cigarettes shipment volume decreased by an estimated 5 per cent. Total cigarette industry volumes declined by an estimated 4 per cent.”

Results for the company's smokeless products were better, with net revenues up 5.1 per cent. The company shipped a total of 841.3 million cans/packs of smokeless tobacco in 2017, down 1.4 per cent on the previous year.