July 30 (Reuters) – Marlboro maker Altria Group fell short of second-quarter earnings per share as macroeconomic uncertainty weighed on spending patterns, hurting demand for its premium cigarettes and nicotine pouches.
Altria’s shares were down 3% in premarket trading.
The company has focused on alternatives to traditional cigarettes, like its peers, over the past few years, and has banked on growing demand for products such as On! nicotine pouches and NJOY vapes in the U.S.
Altria in April said that higher fuel and everyday living costs, triggered by the Middle East conflict, were weighing on discretionary spending, prompting some smokers to seek lower-priced cigarette options.
While the company has relied on its discount offerings such as Basic to cushion the impact, continued down-trading has weighed on demand for premium brands such as Marlboro.
Shipment volumes for Marlboro fell 7.4% in the three months through June 30, and fell 4.2% for On! nicotine pouches.
On the other hand, shipment volumes for discount cigarettes rose 67.3% in the reported quarter.
The company posted an adjusted earnings per share of $1.48, compared with expectations of $1.50 per share, according to data compiled by LSEG.
Altria’s second-quarter revenue net of excise taxes rose 1.2% to $5.36 billion, compared with analysts’ estimate of $5.35 billion.
The company expects full-year earnings per share of $5.61 to $5.72, compared with its earlier target of $5.56 to $5.72.
(Reporting by Shania S Thomas and Juveria Tabassum in Bengaluru; Editing by Maju Samuel)
