Philip Morris International (PMI) has lowered its adjusted earnings per share (EPS) forecast for the full year 2026, citing regulatory uncertainty surrounding Zyn nicotine bags, increased competition, and volatile shipments in the U.S. market, according to Reuters.
Key Overview
- PMI lowers full-year EPS forecast;
- Zyn faces FDA approval uncertainty.
- U.S. Zyn shipments decline by 23.5%;
- VELO faces continued competitive pressure.
PMI Cuts 2026 Profit Forecast Amid Regulatory and Market Challenges
June 2, 2026 – Philip Morris International (PMI) has lowered its full-year profit forecast for 2026, citing regulatory uncertainty surrounding Zyn nicotine bags and increased competition in the tobacco product market, according to Reuters.
PMI now projects adjusted EPS of $8.36 to $8.51 for the full year 2026, down from its previous forecast range of $8.38 to $8.53. Reuters, citing LSEG data, noted that the midpoint of this forecast range is still about 4 cents higher than analysts’ expectations.
Zyn Remains Central to PMI’s Smoke-Free Strategy
The report states that PMI is accelerating its transition from traditional cigarettes to smokeless products, but its Zyn nicotine pouch business faces regulatory approval delays and competitive pressure in the US market.
PMI CFO Emmanuel Babeau stated that the complex regulatory environment continues to slow innovation and the transition of adult smokers to smokeless products.
FDA Approval Delays Continue to Impact New Zyn Products
Reuters previously reported that new nicotine pouch products, including the Zyn Ultra, have not yet received market approval from the US Food and Drug Administration (FDA). The FDA remains cautious about the risks to potential new users, including children and teenagers, when reviewing related products.
Babeau stated that despite competitors’ more aggressive pricing strategies, PMI plans to maintain Zyn’s premium positioning.
Competition from VELO and Other Nicotine Pouch Brands Intensifies
The report also notes that PMI faces competition from products such as British American Tobacco’s (BAT) VELO.
Jefferies analyst Andrei Andon-Ionita stated that Zyn’s sales pressure indicates the brand’s momentum is still weakening, contrary to market expectations of a renewed acceleration in the second half of the year.
He believes that VELO may benefit from Zyn’s decline.
Strong First-Quarter Results Beat Market Expectations
In terms of financial performance, PMI’s first-quarter revenue was $10.15 billion, exceeding market expectations of $9.91 billion; adjusted earnings per share were $1.96, exceeding market expectations of $1.83.
U.S. Zyn Shipments Decline as Inventory Levels Adjust
However, shipments to Zyn in the US market declined by 23.5%. The company stated that this was primarily due to inventory adjustments by distributors and retailers, rather than a decrease in end-user demand.
International Smoke-Free Business Continues to Expand
Meanwhile, PMI’s international smoke-free business saw shipments grow by 11.9%, indicating continued growth in its smoke-free product business outside the US.
The company also stated that its full-year forecast already factored in a minor impact from the Middle East conflict, but it does not expect a long-term shock.
Investors Focus on Long-Term Smoke-Free Growth Potential
Despite lowering its full-year profit forecast, PMI’s stock price rose approximately 6% after the earnings release. Reports indicate this was mainly driven by strong performance in the international smoke-free business and better-than-expected first-quarter results.
Nicotine Pouch Market Enters a More Competitive Phase
Industry insiders believe that the PMI adjustment reflects that the nicotine pouch market is entering a more intense stage of competition: on the one hand, Zyn remains the core of the company’s smoke-free strategy; on the other hand, the pace of FDA approval, competitor pricing, and changes in channel inventory are affecting its growth path in the US market.
