Altria Expands Share Repurchases and Narrows EPS Guidance Amid Strategic Shift to Smoke-Free Growth

Shareholder Returns Intensify: Share Repurchase Program Doubled to $2 Billion

Altria Group, Inc. (NYSE: MO) is doubling down on its commitment to return capital to shareholders. The Board recently approved an expansion of the ongoing share repurchase program—from $1 billion to $2 billion—now set to expire on December 31, 2026. In the third quarter alone, Altria repurchased 1.9 million shares at an average price of $60.13, with nine-month buybacks totaling $712 million at $58.08 per share. Meanwhile, the company distributed $1.7 billion in dividends this quarter, bringing year-to-date payouts to $5.2 billion, and announced its 60th dividend increase in 56 years, boosting the annualized rate to $4.24 per share.

Guidance Narrows as Operational Margins Shine: EPS Range Now $5.37 to $5.45

Reflecting both optimism and prudence, Altria has raised the lower end and tightened its full-year 2025 adjusted diluted EPS guidance to $5.37-$5.45, translating to a projected 3.5% to 5% increase over the prior year’s $5.19 baseline. This comes amid persistent cost pressures and industry headwinds but is anchored by notable margin improvements and ongoing cost optimization efforts. The adjusted tax rate for 2025 is expected in the 23% to 24% range, underscoring a focus on fiscal discipline.

Operational Efficiency Outweighs Declining Legacy Volumes: Margins Hit Record Highs

While Altria’s net revenues fell 3% for the quarter (and 3.4% year-to-date), profit margins continue to expand. Adjusted operating company income (OCI) margins in the core smokeable products segment climbed 1.3 percentage points year-on-year to 64.4% for the quarter and 2.7 points year-to-date. In the oral tobacco segment, adjusted OCI margins rose to 69.2% (up 2.4 points year-on-year in Q3). This robust profitability, despite a combined 8% decline in smokeable shipment volumes and a 9.6% drop in oral tobacco shipments, highlights Altria’s successful execution on pricing and cost control.

Transition to Smoke-Free Accelerates: Innovation Drives Strategic Partnerships

Amid secular declines in combustible products, Altria’s strategic focus on next-generation offerings gained pace. The launch of on! PLUS nicotine pouches in key U.S. states and ongoing regulatory submissions for Ploom heated tobacco devices point to increased smoke-free innovation. Notably, a global collaboration MOU with KT&G aims to open new avenues in international oral nicotine and U.S. non-nicotine products, aligning with Altria’s push toward longer-term growth outside of traditional tobacco.

Still, these newer categories have yet to fully offset the fall in legacy volumes. U.S. oral nicotine pouches, while now accounting for 55.7% of the oral tobacco category, saw on!’s category share decrease by 4.1 points to 15.6% in the quarter, indicating a more competitive landscape. On the flip side, the Marlboro brand remains a premium segment leader despite its overall retail share declining by 1.2 percentage points to 40.4%.

Takeaway: Capital Returns, Margin Strength, and a Clear Path to Transformation

For investors and market watchers, Altria’s third-quarter results tell a nuanced story: the traditional revenue base is steadily shrinking, but aggressive buybacks, record margin expansion, and robust cash returns are setting a floor under shareholder value. The narrowed, confident guidance signals management’s operational clarity amid volatility. As Altria invests further in innovation and adjacent growth areas, stakeholders will be watching whether the shift to smoke-free alternatives and global expansion can ultimately deliver sustainable, long-term growth to complement its time-tested dividend machine.

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