MO | Q4 2024

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Overview

• Non-GAAP EPS of $1.29 beats by $0.01.

• Revenue of $5.1B (+1.6% Y/Y) beats by $50M.

Takeaways

Altria Group (MO) wrapped up 2024 with steady financial performance, growing its adjusted diluted earnings per share by 3.4% for the year.

Throughout the year, the company remained committed to rewarding shareholders, returning over $10.2 billion through dividends and share repurchases.

For 2025, Altria expects full-year 2025 adjusted diluted EPS to fall between $5.22 and $5.37, representing a 2% to 5% increase from 2024.

During the call, CEO Billy Gifford highlighted the rapid shift in consumer preferences toward smoke-free alternatives, with about 28 million U.S. adults now using e-vapor and oral tobacco products—almost as many as the current adult smoking population.

Smoke-free products now make up about 45% of the total nicotine market, up five percentage points from last year. However, the biggest driver of growth in the category hasn’t been regulated products—it’s illicit disposable vapes, which now account for more than 60% of the e-vapor market.

Gifford made it clear (and has done so for years) that Altria sees this as a major problem, arguing that the U.S. regulatory framework is broken. With the FDA failing to approve enough legal alternatives and enforcement against illegal products lacking, the company believes this is undermining the long-term opportunity for tobacco harm reduction (and Altria’s sales).

As a result, Altria has been forced to reevaluate its 2028 smoke-free growth targets, as the explosion of illicit vapes is making it difficult to hit its goals for NJOY.

While NJOY has made headway—expanding into 100,000 stores and growing its market share—the recent patent ruling in JUUL’s favor presents another roadblock. As you can probably imagine, Altria strongly disagrees with the ruling and is pursuing legal and regulatory avenues to keep NJOY’s authorized products on the market.

Beyond e-vapor, Altria’s oral nicotine pouch brand, on!, continues to gain traction. The brand’s retail share grew to 8.9% in Q4, with shipment volume up over 44% from the previous year.

Consumer loyalty for the brand is strengthening, with roughly 800,000 regular buyers, and Helix, the subsidiary behind on!, has achieved profitability for the first time—and ahead of schedule.

Altria is also expanding internationally with on! PLUS, launching new flavors to meet consumer demand in Sweden and the UK.

In traditional tobacco, cigarette volumes declined as expected, with Marlboro’s retail share of the premium category holding strong at 59.4%.

The company continues to focus on profitability in its smokable segment, with adjusted operating income up 5.5% in Q4, driven by strong pricing power. Meanwhile, its cigar business, led by Black & Mild, saw a 2.9% increase in shipment volume for the quarter.

For 2025 and beyond, Altria is keeping its focus on balancing investments in smoke-free alternatives while maintaining the profitability of its core tobacco business. The company announced a new $1 billion share repurchase program for the year, reinforcing its commitment to returning cash to shareholders.

With regulatory uncertainty still present and the nicotine market evolving quickly, Altria is keeping a close eye on policy changes under the new administration, hoping for more clarity on enforcement and faster product approvals in the months ahead.

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