Altria Group’s discount brand shipments increased sharply during the second quarter of 2026 as continued pressure on consumers’ discretionary income accelerated the shift away from premium tobacco products.
Discount brand shipment volume increased 67.3% to 1.49 billion units during the quarter, compared with 889 million units in the same period last year. For the first half of 2026, discount shipments surged 94.4% to 2.79 billion units. Altria’s discount portfolio includes Basic and L&M.
The growth contrasted with continued weakness across Altria’s premium portfolio. Marlboro shipment volume declined 7.4% to 13.39 billion units in the second quarter, while shipments of Altria’s other premium brands fell 5.7%. Marlboro shipments decreased 7.6% during the first half of the year.
Altria said discretionary income pressures continued to influence purchasing behavior among adult nicotine consumers. The discount category’s share of the broader U.S. market increased 2.6 percentage points year-over-year to 33.8% during the second quarter.
Altria’s own discount retail share nearly doubled to 3.9%, compared with 2% in the prior-year quarter. This gain helped the company’s total retail share increase slightly to 45.5%, even as Marlboro’s total category share declined 1.5 percentage points to 39.5%. Marlboro maintained a 59.6% share of the premium segment.
The results demonstrate how Altria is using a broader portfolio strategy to retain consumers who may no longer be willing or able to purchase premium products. Management highlighted continued momentum for Basic, while also introducing Marlboro Cowboy Cut to generate interest among premium consumers.
Total domestic smokeable product shipment volume declined 2.9% during the quarter. After adjusting for trade inventory movements, Altria estimated that domestic shipment volume decreased approximately 4.5%, compared with an estimated 5% decline for the overall industry.
Despite the volume decline and less favorable product mix, Altria’s smokeable products business continued to generate higher earnings. Segment revenue net of excise taxes increased 2% to $4.66 billion, while adjusted operating company income increased 2.4% to approximately $3.02 billion.
The segment’s adjusted operating margin increased 0.3 percentage points to 64.8%. Higher pricing and refunds of taxes and duties paid on imported products helped offset lower shipment volume, increased promotional investments, higher costs, and the shift toward discount brands.
Altria reported total second-quarter net revenue of $6.11 billion, which was essentially unchanged year-over-year. Revenue net of excise taxes increased 1.2% to $5.36 billion.
Reported diluted earnings per share declined 2.8% to $1.37, while adjusted diluted earnings per share increased 2.8% to $1.48. Adjusted diluted earnings per share increased 4.9% to $2.80 during the first half of 2026.
The company narrowed its full-year adjusted diluted earnings guidance to between $5.61 and $5.72, representing expected growth of 3.5% to 5.5% from $5.42 in 2025. The previous guidance range had a lower starting point of $5.56.
Altria returned nearly $3.9 billion to shareholders through dividends and share repurchases during the first half. The company paid $3.6 billion in dividends and spent $335 million repurchasing 5.3 million shares.
KEY QUOTES:
“We delivered strong first-half results, driving adjusted diluted EPS growth of 4.9%, and returned nearly $3.9 billion to shareholders through dividends and share repurchases combined. This performance reflects steady, disciplined execution and confidence in our full-year plan, which allowed us to narrow our earnings guidance for the year.”
“We are raising the lower-end of our full-year 2026 guidance. We now expect to deliver adjusted diluted EPS in a range of $5.61 to $5.72, representing a growth rate of 3.5% to 5.5% from a base of $5.42 in 2025.”
Sal Mancuso, Chief Executive Officer Of Altria
