Altria held its fourth-quarter 2024 earnings call on Thursday. The tobacco company reported net revenues for the fourth quarter were essentially unchanged from fourth-quarter 2023 at $6.0 billion. Revenues net of excise taxes increased 1.6% to $5.1 billion in the fourth quarter.
“2024 was another pivotal year for Altria, headlined by meaningful progress toward our vision, strong financial results and significant cash returns to shareholders,” said Billy Gifford, Altria’s CEO. “Our companies’ leading brands and talented teams enabled our core tobacco businesses to deliver solid income growth and margin expansion, while we strategically invested in our future.”
Rise of Illicit Products
On the earnings call, the Richmond, Virginia-based company did address the illicit e-vapor market. Gifford told investors that the company estimates that the e-vapor category grew by approximately 30% in 2024 and that illicit products represent more than 60% of the category.
“The primary driver of industry and smoke-free growth continues to be the widespread availability of illicit disposable e-vapor products,” Gifford said, which he added is “jeopardizing the long-term opportunities for tobacco harm reduction.”
Gifford said regulators are not holding bad actors accountable.
“Illicit product manufacturers, distributors and retailers have yet to experience any material consequences for violating federal laws and regulations,” he said.
With the illicit e-vapor market continuing to grow, Gifford said this dynamic compromises Altria’s ability to achieve its 2028 smoke-free volume and revenue goals, which were introduced in 2023.
“We believe it compromises our ability to achieve the Njoy-specific financial targets we established in connection with that transaction.
Turning to Njoy, Altria reported that in the fourth quarter, Njoy retail share of consumables in the U.S. multi-outlet and convenience channel increased 2.8 share points versus the prior year to 6.4%. Altria said Njoy devices reported shipment volume increased 22.2% versus the prior year to 1.1 million units.
Rise of Oral Tobacco
Altria said oral tobacco net revenues increased 2.7%, driven by higher pricing. Revenues net of excise taxes increased 2.5%. The U.S. nicotine pouch category grew to 45.7% of the U.S. oral tobacco category, an increase of 9.6 share points versus the prior year, Altria said. In addition, the company said on!’sshare of the nicotine pouch category was 19.5%, an increase of 0.4 share points versus the prior year and a decrease of 0.8 share points sequentially.
Decline in Cigarettes
The Marlboro cigarette maker’s smokable products segment reported an 8.8% drop in its domestic cigarette shipment volumes for fourth-quarter 2024. The company said the decline was “primarily driven by the industry’s decline rate, affected by the growth of illicit e-vapor products and continued discretionary income pressures on average total costs and retail share losses, partially offset by calendar differences and trade inventory movements.
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