British American Tobacco Cuts Cigarette Outlook But Expects Lift in New-Category Revenue — Update

By Aimee Look and Dominic Chopping

British American Tobacco slightly raised its expectations for revenue growth from smoking alternatives such as vapes, but said global industry volumes in its traditional cigarette market would likely be lower than previously expected this year.

Shares fell 3.2% in early London trade.

Despite continued revenue and profit momentum in combustible products like cigarettes, cigars, and pipe tobacco in the U.S., it noted a drop in market share amid pressure from heightened competition, while progress has been slower than anticipated in the Asia-Pacific, Middle East, and Africa region.

The Lucky Strike and Kent cigarette maker now expects global cigarette industry sales volumes to be down around 2.5% this year, having previously guided for a drop of around 2%.

Meanwhile, BAT lifted its guidance for new categories such as vapes and nicotine pouches as revenue growth in the non-combustible market accelerates.

It now expects revenue growth in its new categories portfolio in the mid-teens this year, up from low double-digit previously.

"Combustible performance is underwhelming while new categories are performing strongly," RBC Capital Markets analyst James Edwardes Jones said in a note.

BAT still expects full-year growth to come in at the lower end of its medium-term guidance range, with 3% to 5% revenue growth and 4% to 6% growth in adjusted profit from operations.

Write to Aimee Look at aimee.look@wsj.com and Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

June 02, 2026 04:24 ET (08:24 GMT)