≡ Menu

Advertisement


Altria’s Cigarette Sales and Market Share

Altria’s logo. Source: Flickr

When it comes to cigarettes, you may not have heard of Altria (NYSE:MO), but you certainly have heard of Marbolo. For your information, Marbolo is a popular cigarette brand that belongs to Philip Morris USA and Philip Morris International.

And, the company that owns Philip Morris USA, the maker of Marlboro cigarettes, is Altria. Additionally, Altria also owns John Middleton, which is also a leading maker of Black & Mild cigars.

Altria’s smokeable product sales alone such as cigarettes and cigars generated $18 billion in revenue excluding excise duty in fiscal 2020, representing nearly 90% of the company’s total sales, according to this article: Altria’s revenue and revenue breakdown.

As you can see, cigarettes and cigars sales still make up the largest portion of Altria’s total revenue, driving profitability and giving investors a continuous stream of dividend incomes over the past 30 years, according to Altria’s Dividend Information.

In this article, we will take an in-depth look at Altria’s cigarette sales and shipment volume as well as the market share.

Other than cigarettes, we will also look at the company’s cigars sales and shipment volume even though it contributed significantly fewer sales volume than cigarettes to Altria.

Without further ado, let’s take a look!

Altria’s Smokeable Products Sales (Yearly)

Altria smokeable product sales by year

Altria smokeable product sales by year

* Smokeable product revenue is a GAAP measure and is obtained from Altria’s annual and quarterly financial reports.
* Revenue net of excise taxes is shown in the chart to rule out the effect of excise taxes.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Let’s first look at Altria’s smokeable product sales on an annual basis which is shown in the chart above.

For your information, Altria’s smokeable product revenue comes mainly from cigarette and cigar sales.

Between FY2014 and FY2020, Altria’s smokeable products sales have been on a steady rise.

However, Altria’s smokeable product sales increased the most in FY2020, by about 6.5% compared to FY2019, even during the height of the COVID-19 pandemic.

As of FY2020, Altria’s smokeable product sales reached a massive $17.9 billion in revenue net of excise taxes, a $1.1 billion higher than that of FY2019.

Altria’s Smokeable Products Shipment Volumes (Yearly)

Altria smokeable product shipment volumes by year

Altria smokeable product shipment volumes by year

* Smokeable product shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

For your information, Altria’s smokeable product shipment volumes consist of the shipment volumes of cigarettes and cigars.

While Altria’s smokeable product sales have been on a rise, it has been the opposite in terms of its shipment volumes.

As seen from the chart, Altria’s smokeable product shipment volumes have been on a steady decline between FY2014 and FY2020.

By FY2020, Altria’s smokeable product shipment volumes reached only 103 billion sticks, the lowest figure the company has ever reported.

Altria’s Cigarette Shipment Volumes (Yearly)

Altria cigarette shipment volumes by year

Altria cigarette shipment volumes by year

* Cigarette shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

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 FY2020.

In the last 7 years, Altria’s cigarette shipment volumes have been on a decline.

By FY2020, Altria’s cigarette shipment volumes reached only 101 billion sticks, the lowest the company has ever reported.

Altria’s Cigar Shipment Volumes (Yearly)

Altria cigar shipment volumes by year

Altria cigar shipment volumes by year

* Cigar shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Aside from cigarettes, Altria’s smokeable products are also made up of cigars.

This section shows only Altria’s cigar shipment volumes between FY2014 and FY2020.

While cigarette volume has been declining, Altria’s cigar shipment volumes have been on a rise, with the FY2020 result being the best.

As of FY2020, Altria reported a cigar shipment volume of 1.8 billion sticks, a record high for the company.

However, Altria’s cigar shipment volumes make up less than 2% of the company’s total smokeable product shipment volumes.

Although Altria’s cigar shipment volumes have been increasing, its effect has been negligible.

Altria’s Cigarettes Market Share by Year

Altria cigarette market share by year

Altria cigarette market share by year

* Yearly market share data is obtained from Altria’s annual and quarterly financial reports.
* Yearly market share data do not comes from restated results triggered by product updates, accounting rules changes, sales of subsidiary, etc.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

According to Altria, the market share or retail share results for cigarettes are measured based on the following assumption:

  • Retail share results for cigarettes are based on data from IRI/Management Science Associates, Inc., a tracking service that uses a sample of stores and certain wholesale shipments to project market share and depict share trends.

    This service tracks sales in the food, drug, mass merchandisers, convenience, military, dollar store and club trade classes.

    For other trade classes selling cigarettes, the retail share is based on shipments from wholesalers to retailers through the Store Tracking Analytical Reporting System (“STARS”).

On a yearly basis, we are seeing a similar market share decline for both total cigarettes and Marlboro cigarettes.

Accordingly, Altria’s total cigarette market share has slightly plunged from 50.9% in FY2014 to 49.2% in FY2020.

A similar trend occurs for Marlboro cigarette market share which plunged from 43.8% in FY2014 to 43% in FY2020.

Altria’s Smokeable Product Sales (Quarterly)

Altria quarterly smokeable product sales

Altria quarterly smokeable product sales

* Smokeable product sales data is a GAAP measure and is obtained from Altria’s annual and quarterly financial reports.
* Both revenue and revenue net of excise taxes are shown to show readers the amount of excise taxes that have been paid.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

In terms of quarterly results, Altria’s smokeable product sales have been flat in the last 4 years.

As of Q3 2021, Altria made about $6 billion in revenue and $4.8 billion in revenue net of excise taxes for smokeable products.

These figures represent a year-on-year decline of 5% and 3% for revenue and revenue net of excise taxes, respectively.

Altria’s Smokeable Product Sales (TTM)

Altria TTM smokeable product sales

Altria TTM smokeable product sales

* TTM results consist of the sum of the quarterly results on a trailing 12-month or 4-quarter basis.
* Both revenue and revenue net of excise taxes are shown to show readers the amount of excise taxes that have been paid.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The quarterly plot may not clearly show the trend of Altria’s smokeable product sales.

Therefore, the TTM or trailing 12-month plot is created above to show the long-term trend of Altria’s smokeable product sales.

As seen from the chart, Altria’s TTM smokeable product sales have indeed been rising, albeit at a very slow rate.

The rising trend is clearly displayed for smokeable product revenue net of excise taxes.

As of Q3 2021, Altria’s TTM smokeable product sales reached $22.8 billion in net revenue and $18 billion in revenue net of excise taxes.

These figures represent a year-over-year growth rate of 1% and 2.5% for net revenue and revenue net of excise taxes, respectively.

Altria’s Total Smokable Products Shipment Volumes (Quarterly)

Altria quarterly smokeable product shipment volumes

Altria quarterly smokeable product shipment volumes

* Quarterly smokeable product shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Total smokeable product shipment volumes represent the sum of shipment volumes of all smokeable products, including that of cigarettes and cigars.

On a quarterly basis, Altria’s total smokeable product sales have been gradually declining in the past 3 years, dropping year over year and reaching only 24.5 billion sticks in 2021 3Q.

The 2021 3Q figure represents a decline of 13% on a year-over-year basis.

In short, Altria sold significantly fewer smokable products in 2021 compared to all prior years.

Altria’s Total Smokable Products Shipment Volumes (TTM)

Altria TTM smokeable product shipment volumes

Altria TTM smokeable product shipment volumes

* TTM results consist of the sum of the quarterly results on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The quarterly chart may not be showing the large picture. As such, I have created the above trailing 12-months (TTM) plot to smooth out the bumps and give readers a clearer trend.

As shown, Altria’s total smokable product shipment volume is clearly on a downtrend on a TTM basis.

Sales of total smokable products have been declining 5% on average in the last 3 years and headed to an all-time low of 97 billion sticks as of Q3 2021.

This figure was 5% lower compared to the same quarter a year ago which reported a total shipment volume of more than 102 billion sticks.

The TTM plot reinforces the quarterly plot result that Altria’s total smokable products are indeed decreasing in terms of shipment volumes.

Altria’s Cigarette Shipment Volume (Quarterly)

Altria quarterly cigarette shipment volumes

Altria quarterly cigarette shipment volumes

* Quarterly cigarette shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

In terms of cigarette volume alone, Altria has been selling fewer cigarettes from fiscal 2017 to 2021, as depicted in the chart above.

For your information, Marlboro contributes the biggest sales volume to Altria within the cigarette category.

Nonetheless, Altria’s cigarette sales have declined by as much as 13% year-on-year and reached only 24 billion sticks in 3Q 2021, driven primarily by the decline in Marbolo shipment volume.

Similarly, Altria’s Marlboro cigarette sales stood at 21.4 billion sticks as of 3Q 2021, representing a year-on-year decline of roughly 12%.

Altria’s Cigarette Shipment Volume (TTM)

Altria TTM cigarette shipment volumes

Altria TTM cigarette shipment volumes

* TTM results consist of the sum of the quarterly results on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

The trailing 12-months (TTM) plot above clearly shows the decline in both Altria’s total cigarette and Marlboro sales from fiscal 2018 to 2021.

As of 2021 Q3, both total cigarette and Marlboro shipment volumes have headed to an all-time low of 95.2 billion and 84.1 billion sticks, respectively, on a TTM basis.

Again, the TTM plot clearly depicts the downtrend of Altria’s cigarette sales in the last 4 years and Marlboro is the primary contributor to the decline as it makes up nearly 90% of the company’s total cigarette volume.

Altria’s Cigar Shipment Volume (Quarterly)

Altria quarterly cigar shipment volumes

Altria quarterly cigar shipment volumes

* Quarterly cigar shipment volumes data is obtained from Altria’s annual and quarterly financial reports.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

In contrast, Altria’s cigars shipment volume has gone up over the last 4 years and reached 425 million sticks in Q3 2021.

While Altria’s cigar sales have been on a rising trend, they contribute only 2% of sales volume to the smokeable product category.

Year over year, Altria’s 2021 3Q result represents a decline of as much as 10% compared to the same quarter a year ago.

While cigar shipment volume has declined significantly in 3Q 2021, the long-term rising trend has remained intact.

Altria’s Cigar Shipment Volume (TTM)

Altria TTM cigar shipment volumes

Altria TTM cigar shipment volumes

* TTM results consist of the sum of the quarterly results on a trailing 12-month or 4-quarter basis.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

Similarly, the trailing 12-months (TTM) plot above indicates that Altria’s cigar shipment volume has indeed been increasing and reached multiple new highs in fiscal 2021.

As of 3Q 2021, Altria’s TTM cigar sales totaled 1.84 billion sticks, representing an increase of 6% year on year.

While cigar volume has increased year-over-year, the sequential volume has declined by about 2.4%.

Nevertheless, the TTM plot reinforces the fact that the rising trend is still intact on a long-term basis for Altria’s cigar sales.

Altria’s Cigarettes Market Share by Quarter

Altria cigarette market share by quarter

Altria cigarette market share by quarter

* Quarterly market share data is obtained from Altria’s annual and quarterly financial reports.
* Quarterly market share data do not comes from restated results triggered by product updates, accounting rules changes, sales of subsidiary, etc.
* Altria’s fiscal year begins on Jan 1 and ends on Dec 31.

As shown in the quarterly chart above, Altria’s total cigarette market share has indeed been slowly declining from 51% reported in 1Q17 to 48.9% reported in 3Q21, as much as a 2% point decrease over the last 3 years.

Altria’s Marlboro cigarette is seeing a similar market share decline from 43.7% in 1Q17 to 43.2% in 3Q21.

Summary

In summary, Altria’s shipment volume for cigarettes has steadily been declining over the past 4 years. A similar downtrend is seen in cigarette market share.

In contrast, Altria’s cigars sales have actually been increasing in the past 4 years on a TTM basis. However, cigars sales represent less than 2% of Altria’s total smokable product shipment volumes.

Although Altria’s cigarette sales and market share have continued to plunge, its smokeable product segment net revenue and revenue net of excise taxes have actually been increasing, suggesting that Altria has, perhaps, been raising prices for cigarettes all these years.

References and Credits

1. All financial and sales data in the charts in this article were referenced and obtained from Altria’s annual and quarterly filings available in Altria SEC Filings.

2. Featured images in this article are used under creative commons license and sourced from the following websites: flickr.com/volver-avanzar and Ivan Radic.

Other Statistics You May Find Related

Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

If you find the information in this article helpful, please consider sharing it on social media and also provide a link back to this article from any website so that more articles like this one can be created in the future. Thank you!

{ 0 comments… add one }

Leave a Comment


X

Forgot Password?

Join Us