Altria Reports Mixed Q3 2025 Results Amid Shift to Smoke-Free Products

Altria Navigates Evolving Tobacco Landscape with Mixed Q3 2025 Performance

Altria Group, Inc. (MO) reported its third-quarter 2025 financial results, presenting a mixed performance as the company continues to navigate a challenging traditional tobacco market while aggressively pursuing growth in smoke-free alternatives. The company's adjusted diluted earnings per share (EPS) advanced 3.6% to $1.45, reflecting operational efficiencies and strategic capital deployment. However, net revenues experienced a 3.0% year-over-year decline, settling at $6.1 billion.

Financial Highlights and Strategic Capital Deployment

For the third quarter of 2025, Altria recorded net revenues of $6.1 billion, a 3.0% decrease from the prior year. Revenues net of excise taxes decreased 1.7% to $5.3 billion. Despite the revenue decline, adjusted diluted EPS grew to $1.45, up 3.6%. Reported diluted EPS increased 5.2% to $1.41.

The company's commitment to shareholder returns was evident through the expansion of its share repurchase program. The Board of Directors authorized an increase from $1 billion to $2 billion, extending through December 31, 2026. In Q3 2025 alone, Altria repurchased 1.9 million shares at an average price of $60.13, totaling $112 million. Year-to-date through September 2025, 12.3 million shares were repurchased for $712 million at an average price of $58.08.

Further underscoring its focus on shareholder value, Altria increased its regular quarterly dividend by 3.9% to $1.06 per share, marking its 60th dividend increase in 56 years. This translates to an annualized dividend of $4.24.

Shifting Product Portfolios and Regulatory Developments

The third quarter revealed continued pressures on Altria's traditional smokeable products segment. Domestic cigarette volumes reported an 8.2% decline in Q3 2025, and a 10.6% drop for the first nine months ended September 30, 2024. This contrasts with an estimated industry decline of 8% for the quarter. Despite the overall volume decline, Marlboro's share of the premium segment increased 0.3 points year-over-year to 59.6%, and PM USA's total cigarette retail share rose 0.3 points sequentially to 45.4%.

In the oral tobacco segment, the ON! brand demonstrated resilience, with shipment volume growing nearly 1% in Q3 2025. The U.S. nicotine pouch category grew significantly, now accounting for 49.1% of the U.S. oral tobacco category, an increase of 8.7 share points year-over-year.

Altria's e-vapor segment faced challenges, including a non-cash $873 million goodwill impairment recorded in Q1 2025 tied to the e-vapor reporting unit due to ITC orders affecting NJOY ACE. NJOY shipment volume decreased 70% to 0.3 million units, with CEO Billy Gifford noting the significant impact of the illicit market due to the absence of FDA-authorized flavored choices.

A significant development for the smoke-free sector is the FDA's pilot program to streamline the review process for premarket tobacco product applications (PMTAs) for oral nicotine pouches. This initiative, launched in September, aims to ease requirements on manufacturers by dropping the need for product-specific studies in several areas, potentially accelerating market access for products like Altria's ON! Plus.

Strategic Partnerships and Future Growth Avenues

Altria is actively pursuing strategic partnerships to expand its global smoke-free and non-nicotine product portfolio. The company entered agreements with KT&G, a South Korean tobacco and ginseng company, to jointly pursue growth in global nicotine pouch products and explore U.S. non-nicotine products. As an initial step, an Altria subsidiary will acquire an ownership interest in Another Snus Factory (ASF), the manufacturer of the LOOP Nicotine Pouch brand, concurrent with KT&G's acquisition of the company. This collaboration aims to leverage complementary market experience and capabilities for long-term growth.

The pursuit of growth beyond nicotine is also underway, with an Altria subsidiary and KT&G's subsidiary, Korea Ginseng Corp. (KGC), jointly exploring opportunities in the U.S. wellness segment.

Outlook and Investor Considerations

Looking ahead, Altria narrowed its full-year 2025 adjusted EPS guidance to a range of $5.37–$5.45, representing 3.5%–5.0% growth from a 2024 base of $5.19. Management anticipates a moderation in performance in Q4 as it laps prior share reductions and continues investments in its smoke-free strategy amidst a dynamic regulatory environment.

The company's focus on transitioning adult smokers to harm-reduced alternatives, coupled with strategic investments and partnerships, positions Altria to adapt to evolving consumer preferences and regulatory landscapes. The expanded share repurchase program and consistent dividend increases are expected to continue supporting shareholder returns. Investors will closely monitor the impact of the FDA's streamlined review process on the growth trajectory of nicotine pouch products and the efficacy of Altria's international expansion strategies.