Altria's Smoke-Free Products and Future Projections
2024-02-02
The Altria Group's Q4 2023 Earnings Call took place on February 1, 2024, at 9:00 a.m. ET. The meeting was attended by Altria's management, representatives from the investment community, and members of the media. All relevant materials, including the press release, presentation, quarterly metrics, and corporate responsibility reports, can be accessed on altria.com. It is important to review the Forward-Looking and Cautionary Statements section at the end of the earnings release for projections of future results.
During the earnings call, various topics were discussed, with one of the main focuses being the performance of Altria's smoke-free products. The company offers heated tobacco stick products through Horizon and a heated tobacco capsule product called Swic. These smoke-free alternatives now account for approximately 40% of the total nicotine space.
The distribution of ACE, Altria's e-vapor brand, expanded to over 75,000 stores during the fourth quarter. This represents around 75% of the e-vapor volume sold in the U.S. multioutlet and convenience channel. Additionally, NJOY, another player in the e-vapor market, saw its retail share in the multioutlet and convenience channel reach 3.7% in the fourth quarter, with an increase in November and December.
Addressing the issue of the illicit market, Altria expressed its commitment to supporting a responsible and well-regulated e-vapor market. The growth of illicit flavored disposable e-vapor products has contributed to the overall increase in industry equivalized nicotine volumes. Furthermore, the decline in industry cigarette volumes by an estimated 8% last year can be attributed to the historical secular rate of decline, the rise of illicit e-vapor products, and macroeconomic pressures on smokers.
Looking ahead, Altria will closely monitor various factors that may impact its future performance. These include the state of the economy, tobacco consumer dynamics, enforcement actions against illicit e-vapor products, and developments in regulatory litigation and legislation. The company has projected a range for its 2024 full-year adjusted diluted EPS, expecting it to be between $5 and $5.15. This represents a growth rate of 1% to 4% compared to 2023.
In terms of investments, PM USA, a subsidiary of Altria, has made strategic moves to support the performance of Marlboro Black. This initiative aims to provide a viable option for consumers facing economic strain while keeping them within the Marlboro portfolio. The total discount segment share reached 28.6% in the fourth quarter. However, domestic cigarette volumes experienced a decline of 7.6% in the fourth quarter and 9.9% for the full year.
In summary, the Altria Group's Q4 2023 Earnings Call covered a range of important topics related to the company's earnings, smoke-free products, distribution expansion, retail share, illicit market, future projections, investments, and performance in the cigarette industry. These discussions provide valuable insights into Altria's strategy and outlook for the future.