Altria's 2025 Q2 Earnings Call: Key Contradictions on Inflation, E-Cigarettes, and Consumer Behavior

’on! Pouch Growth and Market Share Increase:
- On! nicotine pouches experienced a 10 share point increase year-over-year, now representing more than 50% of the nicotine pouch category.
- The growth was driven by strong brand awareness campaigns and effective in-person activations at various events, which increased adult tobacco consumer engagement.

Financial Performance and Guidance Adjustment:
- Adjusted diluted earnings per share increased by 8.3% to $1.44 for Q2 and 7.2% for the first half, with oral tobacco segment adjusted OCI growth of 10.9% in Q2.
- The adjusted OCI growth was primarily due to strong performance by on!, supported by disciplined marketing strategies and effective management of pricing and promotions.

Regulatory Challenges and Enforcement Actions:
- The e-vapour category grew with an estimated 20.5 million vapors, up over 1.9 million year-over-year, with flavored disposable products accounting for more than 60%.
- While enforcement actions have picked up, Altria urges more consistent action to clean up the illicit market and support long-term harm reduction goals.

Impact of Economic Factors on Consumer Behavior:
- The company noted that macroeconomic conditions, such as inflation, are affecting adult tobacco consumers, particularly those in low-income segments.
- Altria is closely monitoring purchasing behaviors and remains focused on providing value to consumers through strategic pricing and brand management.