Altria reports its 2023 third-quarter and nine-months business results and narrows its guidance for 2023 full-year adjusted diluted earnings per share (EPS).
The company’s net revenues for the third quarter decreased 4.1 per cent to USD 6.3 billion, primarily driven by lower net revenues in the smokeable products segment. Revenues net of excise taxes decreased 2.5 per cent to USD 5.3 billion. For the first nine months, net revenues decreased 2.5 per cent to USD 18.5 billion, primarily driven by lower net revenues in the smokeable products segment. Revenues net of excise taxes decreased 0.8 per cent to USD 15.5 billion.
The smokeable products segment reported domestic cigarette shipment volume decreased 11.6 per cent, primarily driven by the industry’s decline rate (impacted by macroeconomic pressures on ATC disposable income and the growth of illicit e-vapor products), retail share losses, calendar differences and trade inventory movements. Marlboro retail share of the total cigarette category was 42.3 per cent, a decrease of 0.3 share points versus the prior year, primarily due to increased macroeconomic pressures on ATC disposable income and increased competitive activity. Marlboro retail share increased 0.3 share points from the second quarter of 2023 (Marlboro retail share for the second quarter of 2023 was revised to 42.0 from 42.1, based upon the most recent periodic data refresh from Circana). Additionally, Marlboro share of the premium segment was 58.9 per cent, an increase of 0.4 share points versus the prior year and 0.3 share points sequentially.
Net revenues in the oral segment increased 2.2 per cent, primarily driven by higher pricing and lower promotional investments, partially offset by lower MST shipment volume and a higher percentage of on! shipment volume relative to MST versus the prior year (mix change). Revenues net of excise taxes increased 2.7 per cent. Oral tobacco products segment reported domestic shipment volume decreased 3.3 per cent, primarily driven by retail share losses in MST and calendar differences, partially offset by the industry’s growth rate and other factors. When adjusted for calendar differences, oral tobacco products segment shipment volume decreased by an estimated 2 per cent.
On 1 June 2023, Altria completed its acquisition of NJOY Holdings, Inc. “We strengthened NJOY’s global supply chain to provide sustainable support for the anticipated volume increase associated with our NJOY ACE (ACE) expansion plans. We do not anticipate capacity constraints as we execute our initial expansion plans. In addition, we are filling inventory gaps at retail and expanding distribution of ACE. We continue to expect ACE distribution to reach a total of 70,000 stores by year-end, representing approximately 70 per cent of e-vapor volume and 55 per cent of cigarette volume sold in the U.S. multi-outlet and convenience channel,” Altria said. Reported shipment volume of ACE was approximately 7.5 million pods.
“Our highly profitable traditional tobacco businesses were resilient in a dynamic operating environment during the third quarter and first nine months, providing fuel for our business transformation and significant cash returns to our shareholders,” said Billy Gifford, Altria’s Chief Executive Officer. “I believe we have the appropriate strategies and people in place to execute our growth plans. I continue to believe that we can achieve our Vision and create long-term value for our shareholders.”
“We are narrowing our full-year 2023 guidance and now expect to deliver adjusted diluted EPS in a range of USD 4.91 to 4.98. This range represents an adjusted diluted EPS growth rate of 1.5 per cent to 3 per cent from a base of USD 4.84 in 2022.”