1) Strong Q1 Performance
- Adjusted diluted EPS increased by 7.3% YoY in Q1 2026.
- Smokeable products segment showed strong income growth, with adjusted OCI growing by 6.3% and margins expanding to 65.1%.
- Domestic cigarette volumes declined by 2.4%, but moderation in declines was noted.
- PM USA's total portfolio strategy effectively captured market share, with Marlboro's premium segment share increasing to 59.5%.

2) Oral Tobacco and Nicotine Pouches
- The oral tobacco segment generated over $400 million in adjusted OCI, with strong margins at 67.4%.
- The on! nicotine pouch portfolio saw a shipment volume increase of nearly 18%, with on! PLUS now available in 100,000 stores.
- The nicotine pouch category now represents over 58% of total oral tobacco, reflecting a 9.5% increase in industry volume.
- Marketing efforts for on! PLUS include in-person events and digital advertising, aimed at increasing brand visibility and consumer engagement.

3) E-Vapor Market Dynamics
- The e-vapor category is experiencing moderation in growth, particularly due to enforcement against illicit flavored disposable products.
- Approximately 20.5 million adult vapors were estimated at the end of March, consistent with the previous year.
- The company is advocating for a more efficient FDA authorization process to support compliant e-vapor products.
- Enforcement actions have shown early signs of success, potentially stabilizing the market.

4) Guidance and Shareholder Returns
- Full-year adjusted diluted EPS guidance reaffirmed at $5.56 to $5.72, reflecting a growth rate of 2.5% to 5.5% from 2025.
- Approximately $1.8 billion in dividends paid and 4.5 million shares repurchased for $280 million in Q1.
- The company retired over $1 billion of debt, maintaining a total debt-to-EBITDA ratio of 1.9x.
- Continued focus on balancing reinvestment in growth categories while managing economic pressures on consumers.

5) Leadership Transition and Future Outlook
- This earnings call marks the final one for CEO Billy Gifford, who expressed confidence in the leadership team and strategy moving forward.
- The call did not provide specific updates on new product launches beyond on! PLUS or detailed consumer feedback on recent product introductions.

Bottom line: Altria's strong Q1 performance, driven by effective portfolio management and strategic investments in nicotine products, positions the company favorably for continued shareholder returns, despite ongoing challenges in the e-vapor market and economic pressures on consumers.