Market Analysis

British American Tobacco (BAT) announced on Tuesday that it anticipates a slight decline in its half-year revenue and adjusted profit from operations. Despite this, the company upheld its forecast for low single-digit annual growth.

The manufacturer of Dunhill and Lucky Strike cigarettes has adjusted its revenue and profit growth expectations due to challenging conditions in the United States, one of its major markets. Both BAT's traditional tobacco products and newer offerings, such as vapes, are under pressure as consumers opt for cheaper cigarettes or illegal disposable vapes instead of BAT's pricier brands.

The company noted that while there are early signs of recovery in the U.S., traditional cigarette volumes have dropped by about 9% industry-wide so far this year.

Chief Executive Tadeu Marroco expressed confidence in the future, stating that current investments in the U.S. and other regions would position BAT for stronger growth. "We expect growing momentum in the second half, enabled by the investments we are making today," he said.

BAT had previously indicated that its performance would be stronger in the latter half of the year, with the U.S. market and ongoing investments impacting short-term results. The company expects a low single-digit decline in half-year revenue and adjusted profit from operations but remains on track to meet its full-year guidance. It aims to achieve revenue growth of 3-5% by 2026.

Paraphrasing text from "Reuters" all rights reserved by the original author.