Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Adjusted diluted EPS growth | 4.8% | versus prior year |
| Smokable products adjusted OCI | $3.1 billion | up 3.9% |
| on! shipment volume | 47.8 million cans | up 13.3% |
| Oral tobacco adjusted OCI | $443 million | down 3.7% |
| Quarterly dividend | $1.11 per share | up 4.7% |
Guidance and outlook
- Full year adjusted diluted EPS expected in a range of $5.66 to $5.74.
How management sounded
Positive (+6 on our -10 to +10 scale). Management raised full year earnings guidance and highlighted strong performance in core segments despite ongoing macroeconomic pressures on consumers. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Industry Volume Resilience
Asked: Analysts asked about the resilience of cigarette volumes and if pressure on smokers is easing.
Answer: Management noted that nicotine is resilient but consumers remain under pressure, adding that cigarette volume declines are being moderated by fewer consumers using illicit e-vapor products.
Cowboy Cut Positioning
Asked: Analysts asked about the long-term positioning of the Marlboro Cowboy Cut sub-brand.
Answer: Management stated it provides a premium option at the right price to retain value-sensitive smokers and noted they have successfully used similar introductory pricing strategies in the past.
on! Growth Expectations
Asked: Analysts asked about volume growth expectations for on! nicotine pouches.
Answer: Management highlighted the potential of the 12-milligram product and new flavor extensions, noting that volume growth is supported by the transition of consumers from moist smokeless tobacco.
Duty Drawback
Asked: Analysts asked about the sustainability of the duty drawback benefit.
Answer: Management indicated that the benefit is expected to remain balanced across the second half of the year and noted that the contract manufacturing agreement with PMI begins in 2027.
What to watch before the next call
- The impact of the 12-milligram on! product and new flavor extensions on retail share.
- Ongoing regulatory developments regarding the FDA authorization process for new products.
- The effectiveness of enforcement efforts against illicit e-vapor products.
