Altria reiterated its profitability target for 2025, stressing that it will accelerate the layout of new tobacco products in response to the shrinking of traditional tobacco and competition in the vape market. At the same time, it will face challenges such as tightening by the U.S. Food and Drug Administration and restrictions on nicotine synthesis.
Altria Group, February 19 (Altria Group) CEO Billy Gifford announced on its official website (Billy Gifford, Sal Mancuso, Chief Financial Officer (Sal Mancuso) at the New York Customer Analyst Conference (CAGNY), And reiterated the company’s full-year earnings forecast for 2025.
In his presentation, Gifford emphasized that Altria is “optimizing and accelerating” (Optimize & Accelerate plans to drive a strategic shift with the goal of “facilitating the transition of adult smokers to a smoke-free future.”
- “Our long-term competitiveness in the U.S. nicotine market comes from a commitment to responsibility, a deep understanding of consumer needs, and a diverse portfolio that covers all smokeless product types.” Strong cash flow and flexible debt sheet will support investment and shareholder returns.”
In the announcement, Altria listed several potential risks, including:
Control uncertainty: The FDA may ban menthol tobacco (which is expected to affect 15% of the company’s revenue);
Impact of illegal vapes: The market share of illegal vapes will reach 40% in 2024, squeezing the space of compliant brands such as NJOY;
Supply chain stress: Drought in Brazil’s main tobacco-producing areas has led to an increase in procurement costs of about 8%.
In the traditional tobacco business, Philip Morris International (PMI) USA saw a 4.5% decline in cigarette shipments in 2024 but achieved 1.2% revenue growth through a price increase strategy. In the field of new tobacco products, NJOY vapes are the only change-over vapes that have passed the FDA’s PMTA certification, and their sales volume has increased by 32% year-on-year in 2024, but their gross profit margin is only 45% due to pricing restrictions. Nicotine bag brand “On!” With a market share of 28%, Altria plans to launch new tobacco-free products in 2025; It will be a joint venture project with Japan Tobacco (JT), and the first product is expected to be launched in Q4 2025.
Gifford stressed that Altria faces a three-way attack from British American Tobacco, Juul, and Chinese brands, and its brand NJOY takes “FDA compliance” as its core differentiation advantage, becoming one of the few vape brands in the US market that has passed PMTA (pre-market tobacco product Application) certification; Philip Morris International (PMI) IQOS occupies 70% of the global share, Altria needs to break through the technical barriers through the Horizon joint venture project; At the same time, the regulatory environment continues to tighten, and the FDA plans to introduce new nicotine product standards in the second quarter of 2025 that could restrict synthetic nicotine use, which will pose challenges for Altria.
