Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Net Revenue | $11.4 billion | +5.5% in dollar terms |
| Adjusted Diluted EPS | $2.36 | +5.4% |
| Adjusted Operating Income Margin | Almost 45% | +130 basis points |
| IQOS HTU Shipments | 41.5 billion units | Not stated |
| VEEV Shipment Growth | 62% | Not stated |
Guidance and outlook
- Full-year organic net revenue growth: 5% to 7%.
- Full-year organic operating income growth: 7% to 9%.
- Full-year currency-neutral adjusted diluted EPS growth: 7.5% to 9.5%.
- Full-year adjusted diluted EPS in dollar terms: $8.29 to $8.44.
- Q4 U.S. adjusted OCI: Around 0 or slightly negative.
How management sounded
Positive (+6 on our -10 to +10 scale). Management delivered record quarterly EPS and strong organic growth while navigating geopolitical cost pressures and significant strategic investments in the U.S. 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
Guidance and Costs
Asked: Bonnie Herzog from Goldman Sachs asked why the company is guiding to the lower half of the range despite strong Q3 results.
Answer: Management cited cost pressures from geopolitical tensions in the Middle East and Ukraine, alongside exceptional U.S. investment for ZYN portfolio expansion.
ZYN Strategy
Asked: Bonnie Herzog from Goldman Sachs asked about the performance of ZYN innovations and the impact of the 20-pouch transition.
Answer: Management stated initial results are positive and the 20-pouch transition is a value proposition improvement that will impact Q4 revenue but drive long-term growth.
Inflation and Offsets
Asked: Matt Smith from Stifel asked how the company plans to offset inflationary impacts.
Answer: Management highlighted the resilience of their supply chain, strong pricing power, and margin expansion as key buffers against volatile energy and input costs.
Germany Taxation
Asked: Andrei Andon-Ionita from Jefferies asked about the impact of sharp excise tax increases in Germany.
Answer: Management acknowledged the challenge but noted they are well-positioned with strong brands like Marlboro and continued IQOS growth to compete effectively.
What to watch before the next call
- Impact of the 20-pouch ZYN transition on Q4 U.S. profitability.
- Persistence of energy-related inflation and geopolitical disruptions in the Middle East and Ukraine.
- Performance of new ZYN variants and portfolio expansion in the U.S. market.
