Philip Morris cuts annual profit forecast on cost pressure, weak pricing power

June 2 (Reuters) – Philip Morris cut its annual profit forecast on Tuesday, with CEO Jacek Olczak citing margin pressure due to higher energy costs from the Iran conflict and currency swings, at a time when consumers rein in spending.

Olczak, speaking at the Deutsche Bank global consumer conference, said recent U.S. FDA moves to relax enforcement on unauthorized vaping and nicotine pouches was a “net positive,” and reduces regulatory uncertainty for Zyn and should support category growth. 

Shares of the tobacco giant were down about 1% before the bell. 

• Philip Morris now expects 2026 adjusted earnings per share of $8.31 to $8.46, a growth of 10.2% to 12.2% from 2025 levels, and lower than a prior forecast range of $8.36 to $8.51. Analysts were expecting a profit of $8.41 per share.

• CEO Olczak said the company could offset some impacts from higher costs, but warned that price increases are “not always fully absorbed” in a more competitive market.

• Company said the newly released Zyn Ultra will be priced at a lower cost per pouch than its flagship range, in a move aimed at reducing its steep price premium and improving competitiveness.

• In April, the company lowered its 2026 adjusted profit forecast amid regulatory uncertainty over its Zyn nicotine pouches and rising competition in tobacco products.

• Philip Morris has been expanding across smoke-free products including heated tobacco device IQOS, vapes and oral nicotine pouches.

• It said recent price increases in Japan, driven by excise tax changes, have weighed on category growth but so far have not materially hurt its market share.

(Reporting by Savyata Mishra in Bengaluru; Editing by Shailesh Kuber)