When it comes to cigarettes, you may not know Altria (NYSE:MO), but you certainly have heard of Marlboro.
For your information, Marlboro is a famous cigarette brand that is owned by Philip Morris USA and Philip Morris International.
And, the company that owns Philip Morris USA, the maker of Marlboro cigarettes, is Altria (NYSE:MO).
Additionally, Altria also owns John Middleton, the maker of the popular Black & Mild cigar.
That said, Altria’s revenue excluding excise duty for cigarettes and cigars alone totaled $18 billion in fiscal 2022, the largest among all product segments, and represents a massive 88% of the company’s total sales, according to this article – Altria Sales By Product Segment, Margin And Profitability.
On top of that, the smokeable product segment, as Altria calls it, produced more than $10 billion of operating income for the company in 2022, also the largest by product category, according to the same article.
Therefore, the sales of cigarettes and cigars are the bread and butter of the company as they make up the largest portion of revenue and profit.
In this article, we cover only the smokeable product segment and this includes cigarette and cigar revenue figures, shipment volumes as well as market share.
Investors who are interested in Altria’s smokeless product segment may visit this page – Altria Smokeless Product Sales And Market Share.
Let’s start with the following topics!
Altria’s Smokeable Product Revenue
Altria’s smokeable product revenue comes primarily from the sales of cigarettes and cigars.
Since fiscal 2014, Altria’s smokeable product revenue has been on a steady rise and reached a record high of $18.2 billion as of 2022.
The smokeable product segment revenue figure comprises a massive 88% of the company’s total net sales excluding excise taxes, according to this article – Altria Revenue Breakdown By Segment.
A particular trend worth mentioning is the significant rise of the smokeable product revenue in 2020 over the prior year.
For example, the figure rose by about 6.5% to nearly $18 billion in fiscal 2020, the biggest growth since 2014 and this happened during the height of the COVID-19 pandemic.
The reasoning here was probably that people smoked a lot more during a pandemic.
Nevertheless, Altria’s smokeable product revenue remained roughly at the same level since 2020.
Altria’s Smokeable Product Shipment Volumes By Year
Altria’s smokeable product shipment volumes come from the combined shipment volumes of cigarettes and cigars.
While the smokeable product revenue has been on the rise over the past 9 years which we saw earlier, it has been the opposite for shipment volumes.
As seen in the chart above, Altria’s smokeable product shipment volumes have been on a steady decline in the same period.
In fiscal 2022, the figure reached only 86 billion sticks, the lowest number that the company has ever reported.
In terms of growth rate, Altria’s smokeable product sales volume has never reported any growth over the past 9 years and declined by a massive 10% in fiscal 2022 over 2021.
Altria’s Smokeable Product Shipment Volumes By TTM
The TTM plot presented in the chart above is a more refined version of the annual plot and it shows the results on a quarterly basis.
As seen, Altria’s smokable product sales volume is clearly on a downtrend and has declined in almost every quarter on a TTM basis.
As of 1Q 2023, the TTM result reached an all-time low of 84 billion sticks.
This figure was 11% lower compared to the same quarter a year ago which reported a total shipment volume of 94 billion sticks.
Altria’s Total Cigarette Shipment Volumes By Year
Altria’s smokeable product shipment volumes can be broken down into 2 categories, and they are (1) cigarettes and (2) cigars.
This section shows only Altria’s cigarette shipment volumes between FY2014 and FY2022.
In the last 9 years, Altria’s total cigarette shipment volumes have been on a decline.
By fiscal 2022, Altria’s total cigarette shipment volumes reached only 85 billion sticks, the lowest the company has ever reported.
Year over year, the figure reported in 2022 was down by 10% over 2021.
Altria’s Total Cigarette Shipment Volume By TTM
The trailing 12-month (TTM) plot above clearly shows the decline in Altria’s total cigarette sales volume from fiscal 2017 to 2023.
As of 2023 Q1, total cigarette shipment volumes headed to an all-time low of 82.3 billion sticks on a TTM basis, down 11% from a year ago.
The decline in total cigarette sales for Altria occurs in almost every quarter.
Altria’s Percentage Of Cigarette Sales To Total Volume
Altria’s cigarette sales volume forms the biggest percentage within the smokeable product segment.
As shown in the chart, Altria’s total cigarette sales contributed a massive 98% of the sales volume to the company as of 2022.
However, this ratio has been on a steady decline since 2014 and the ratio was much higher at 99% back in 2014.
Since 2014, the percentage has declined by 1 percentage point during the 9-year period.
What has declined in one product segment is a gain in another product segment.
Altria’s percentage decline in cigarette sales volume is replaced by the gain in the percentage of cigar sales which we will see in later discussions.
Altria’s Total Cigar Shipment Volumes By Year
Aside from cigarettes, Altria also ships cigars within the smokeable product segment.
However, Altria’s cigar sales volume is much smaller than that of cigarettes.
In fiscal 2022, Altria shipped only 1.7 billion sticks of cigars in the entire year, a much smaller number compared to cigarettes.
A trend worth mentioning is the increasing sales volume of Altria’s cigars over the years.
As seen, Altria’s cigar sales volume has been on a steady rise between 2014 and 2022.
The growing cigar sales volume is contrary to Altria’s cigarette sales volume which has been on the decline as shown in prior discussions.
Since 2014, Altria’s cigar sales volume has increased by 36% during the 9-year period or roughly 4.5% on an annual basis.
Altria’s Total Cigar Shipment Volume By TTM
Similarly, the trailing 12-month (TTM) plot above indicates that Altria’s cigar shipment volume has indeed been on the rise and peaked at roughly 1.9 billion sticks recorded in 2Q21.
After that, cigar shipment volume has sort of declined slightly.
As of 1Q 2023, Altria’s TTM cigar sales volume totaled 1.7 billion sticks on a TTM basis, down 1% from the quarter a year ago.
Altria’s Percentage Of Cigar Sales To Total Volume
As shown in the chart above, Altria’s cigar sales volume makes up only a few percentage points of the total volume.
As of 2022, the result reached 2% of the total volume within the smokeable product segment.
Despite the growing percentage points over the years, Altria’s cigar sales volume is still far smaller than that of cigarettes.
Altria’s Marlboro Shipment Volumes By Year
Marlboro is Altria’s most popular product in terms of sales volume within the smokeable product segment.
And, Marlboro is also the most popular in terms of sales volume within the cigarette segment and the respective sales volume outpaces all other cigarette brand names.
However, Altria’s Marlboro sales in the U.S. have been on a decline as shown in the chart above.
For your information, Altria can only sell the Marlboro cigarette within the U.S. as the right to ship Marlboro internationally is owned by Philip Morris International.
That said, Altria’s Marlboro sales volume in the U.S. totaled 75.4 billion sticks as of 2022, a new low over the past 9 years.
Since 2014, Altria’s Marlboro sales volume has declined by 30% over the 9-year period or roughly 4% on average on an annual basis.
Altria’s Marlboro Shipment Volumes By TTM
On a TTM basis, Altria’s Marlboro sales volume has experienced a similar decline and reached only 73.5 billion sticks as of 1Q 2023, a record low over the period shown in the chart.
The figure reported in 1Q 2023 was down 10% over the quarter a year ago.
Altria’s Percentage Of Marlboro Sales To Total Cigarette Volumes
Altria’s Marlboro contributes the biggest share of sales volume to the company within the cigarette segment.
As seen, Altria’s Marlboro sales volume made up 89% of the total cigarette volume and the ratio has been on the rise too.
For example, Altria’s Marlboro sales volume made up only 86% of the total cigarette volume back in 2014 and this figure reached 89% as of 2022 despite the declining sales volume numbers all these years.
Altria’s Cigarettes And Marlboro Market Share
According to Altria, the market share or retail share results for cigarettes are measured based on the following assumption:
Also, the market share data presented here refer to sales volume conducted in only the U.S.
That said, Altria’s market share for both total cigarettes and Marlboro in the U.S. has been on a slow decline over the past 9 years.
Accordingly, Altria’s cigarette market share has slightly plunged from 50.9% reported in fiscal 2014 to 47.9% reported in fiscal 2022.
A similar trend occurs for Marlboro’s market share whose number has plunged from 43.8% reported in fiscal 2014 to 42.5% as of 2022.
Both market share numbers reported in 2022 represent new lows over the 9-year period since 2014.
Altria’s Black & Mild Shipment Volumes By Year
Black & Mild is one of Altria’s popular cigar brand names and the sales volume from this brand alone makes up nearly the entire volume of the company’s cigar sales.
While cigar sales volume has been steadily going higher, the figure is far smaller compared to that of cigarettes.
As shown in the chart above, Altria recorded a sales volume of only 1.7 billion sticks in 2022 for the Black & Mild cigar.
This figure has risen by 39% since 2014 or roughly 5% on average on an annual basis over the 9-year period.
Altria’s Percentage Of Black & Mild Sales To Total Cigar Volumes
Altria’s Black & Mild cigars comprise nearly 100% of the total cigar volume.
As of 2022, this figure reached 99.8% and has risen from 98% reported in 2014.
In summary, Altria’s sales volume for cigarettes, Marlboro in particular, has steadily been declining over a number of years.
A similar downtrend is seen in Altria’s market share for cigarettes.
While cigarette sales volume has declined, the revenue has increased, illustrating that Altria has raised the price of cigarettes all these years to make up for the loss in volume.
On the other hand, Altria’s cigar sales volume has been on the increase.
Despite the rise in cigar sales volume, it made up only 2% of the total smokeable product volume compared to 98% for cigarettes.
Therefore, Altria is still pretty much a cigarette company as revenue from the smokeable product segment contributed 88% of total net revenue in 2022 while sales volume from cigarettes alone made up 98% of the total volume within the smokeable product segment.
References and Credits
1. All data presented in this article were referenced and obtained from Altria’s earnings reports, SEC filings, and financial statements which are available in Altria SEC Filings.
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