RICHMOND, Va. – Despite income and volume declines during the past quarter, officials with Altria Group Inc. reported progress in the first half of 2018, pointing out an increase of 0.1 share point in its Marlboro brands to 43.2%.
In a quarterly investor call on July 26, Howard Willard, chairman and CEO of Richmond, Va.-based Altria Group, said the company's strategy for smokeable products was to maximize income while maintaining momentum for its Marlboro cigarettes and Black & Mild cigars. For its smokeable products, adjusted income declined 2.8% in the second quarter and 2.4% in the first half of 2018, “as expected, given our investments,” Willard said. “[The company] entered the year focused on stabilizing Marlboro with investments in product expansions, packaging innovations and brand equity.”
The company’s cigarette volumes declined an estimated 5% in the second quarter compared to an estimated industry decline of 3.5%. “This is consistent with our view that industry volume declines would moderate as the effects of the  California state excise tax were fully lapsed,” he said.
While industry performance may be volatile on a quarterly basis, Willard said the past four quarters have seen an overall rate of decline for the industry of about 4%, which is consistent with the historical long-term decline rate of 3% to 4%. “We believe the adult tobacco consumers’ economic situation remains positive, and we continue to closely watch the many economic factors, including gas prices and wage growth, that could affect their spending habits,” he said.
Here are other insights from the quarterly call …
Photo courtesy of Hans.