Altria Group, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenues for the third quarter of 2026 were $6.132 billion, a 1.0% increase year-over-year; for the first nine months, revenues were $17.671 billion, a 1.4% increase.
• Revenues net of excise taxes increased 3.6% to $5.441 billion in Q3 2026 and 3.3% to $15.555 billion for the first nine months.
• Reported diluted EPS was $1.51 in Q3 2026 (up 7.1%) and $4.18 for the first nine months (up 21.2%).
• Adjusted diluted EPS was $1.52 in Q3 2026 (up 4.8%) and $4.33 for the first nine months (up 5.1%).
• Adjusted OCI margins for the smokeable products segment increased 0.1 percentage point to 64.5% in Q3 and 0.4 percentage points to 64.8% for the first nine months.
• Adjusted OCI margins for the oral tobacco products segment decreased 2.8 percentage points to 66.4% in Q3 and 2.2 percentage points to 66.8% for the first nine months.
• Reported effective tax rate was 23.6% in Q3 2026 (up 0.8 percentage points) and 22.9% for the first nine months (down 3.1 percentage points).
• Adjusted effective tax rate was 23.0% in Q3 2026 (down 0.1 percentage points) and 23.0% for the first nine months (down 0.3 percentage points).
• Cost of sales included $775 million in Q3 2026 and $2.228 billion for the first nine months related to resolution expenses for state settlement agreements.
• Cost of sales included $60 million in Q3 2026 and $187 million for the first nine months in FDA user fees.
• (Income) losses from investments in equity securities were $(242) million in Q3 2026 and $(487) million for the first nine months, primarily driven by ABI.

Guidance and Future Outlook:

• Altria raised its 2026 full-year adjusted diluted EPS guidance to a range of $5.66 to $5.74, representing growth of 4.5% to 6.0% from a 2025 base of $5.42.
• Guidance contemplates moderated e-vapor industry growth, increased macroeconomic uncertainty, investments in contract manufacturing capabilities, and the non-return of NJOY ACE to the marketplace in 2026.
• Guidance assumes reinvestment of anticipated cost savings from the Optimize & Accelerate initiative and continued investments in the company's Vision.
• Management cannot estimate the forward-looking impact of certain income and expense items, including litigation, impairment charges, and NPM adjustments, on reported diluted EPS.

Business Segments and Product Lines:

• Smokeable Products: Net revenues increased 0.8% in Q3 and 1.4% for the first nine months, driven by higher pricing. Reported domestic cigarette shipment volume decreased 2.9% in Q3 and 2.8% for the first nine months.
• Smokeable Products: Marlboro retail share of the total cigarette category was 39.5% in Q3 (down 1.0 share point) and 39.5% for the first nine months (down 1.4 share points). Marlboro share of the premium segment was 60.0% in Q3 (up 0.3 share points).
• Smokeable Products: The industry discount retail share was 34.1% in Q3 (up 2.0 share points) and 33.8% for the first nine months (up 2.4 share points).
• Smokeable Products: Reported cigar shipment volume increased 0.9% in Q3 and 2.0% for the first nine months.
• Oral Tobacco Products: Net revenues decreased 0.1% in Q3 and 1.2% for the first nine months, driven by lower shipment volume and higher promotional investments.
• Oral Tobacco Products: Domestic shipment volume decreased 4.3% in Q3 and 5.4% for the first nine months.
• Oral Tobacco Products: The nicotine pouch category represented 61.2% of the oral tobacco category in Q3 (up 5.8 share points).
• Oral Tobacco Products: on! retail share of the oral tobacco category was 8.3% in Q3 (up 0.1 share point) and 8.2% for the first nine months (down 0.2 share points).
• Smoke-Free: Helix expanded its on! PLUS portfolio with Blueberry Mint and Mango Pineapple flavors in 6-, 9-, and 12-milligram strengths. Watermelon Mint is planned for Q4 2026.
• Smoke-Free: Helix is preparing for the next wave of innovation, which is now underway.

Market and Competitive Landscape:

• Total domestic cigarette industry volume decreased by an estimated 5% when adjusted for trade inventory movements.
• Total oral industry volume increased by an estimated 5.5% for the six months ended September 30, 2026, driven by growth in oral nicotine pouches and offset by declines in moist smokeless tobacco.
• Continued discretionary income pressures on adult smokers contributed to gains in the industry discount retail share.

Risks and Challenges:

• Risks include the growth of the e-vapor category and illicit disposable e-vapor products, illicit trade in nicotine products, and unfavorable outcomes in litigation or government investigations.
• Risks include changes in consumer preferences, macroeconomic conditions affecting disposable income, and regulatory actions by the FDA.
• Risks include the inability to develop and commercialize innovative products, supply chain disruptions, and potential goodwill or intangible asset impairments.
• Risks include the failure to realize benefits from strategic relationships, investments in ABI and Cronos, and compliance with complex international laws.

Management Commentary and Tone:

• CEO Sal Mancuso stated the company delivered strong financial performance, growing adjusted diluted EPS by 4.8% in the third quarter.
• Management highlighted a data-driven, total portfolio approach in smokeable products, with Cowboy Cut strengthening Marlboro's premium position and Basic gaining share in the discount segment.
• Management noted that highly cash-generative businesses supported significant returns to shareholders through dividends and share repurchases.
• Management expressed confidence in the full-year plan, citing strong performance through the first nine months as the basis for raising guidance.

Analyst Questions and Answers:

• No specific analyst questions and answers are included in the provided text.

Other Key Points:

• The Board authorized a $1 billion expansion of the existing share repurchase program, which now expires on December 31, 2027.
• In the third quarter, the company repurchased 5.9 million shares at an average price of $68.52 per share, totaling $400 million.
• Through the first nine months, the company repurchased 11.2 million shares at an average price of $65.78 per share, totaling $735 million.
• In August, the Board increased the regular quarterly dividend by 4.7%, marking the 61st increase in 57 years; the current annualized dividend rate is $4.44 per share.
• The company maintains a progressive dividend goal targeting mid-single digits dividend per share growth annually through 2028.
• Dividends paid were $1.7 billion in the third quarter and $5.3 billion for the first nine months.
• In the first nine months of 2026, the company recorded pre-tax charges of $106 million for asset impairment, exit, and implementation costs, primarily related to USSTC facilities consolidation.
• In the first nine months of 2026, the company recorded pre-tax charges of $120 million for tobacco and health and certain other litigation items.
• In the first nine months of 2025, the company recorded a non-cash impairment charge of $873 million to the e-vapor reporting unit goodwill.