© Reuters.
By Geoffrey Smith
Investing.com — British American Tobacco (LON:) stock fell 2.6% to a two-week low by lunchtime in London trading on Thursday, as the group warned that the long-term decline in U.S. cigarette sales had quickened in recent months, offsetting continued growth in its alternative nicotine products.
BAT, the company behind Lucky Strike, Camel, and Dunhill cigarettes, said U.S. sales volumes “remain under pressure due to ongoing macro-economic factors and post-COVID normalization of consumption patterns”, and warned that it has seen “early signs of accelerated downtrading in the industry in the second half of the year.”
That news overshadowed other elements of a regular update, in which it said global consumption was falling less sharply than it had previously expected, thanks to growth in emerging markets. It upheld its previous forecast of between 2% and 4% in sales growth in the fiscal year just ended, along with adjusted earnings per share growth of around 5% in constant currencies.
The company has been hit in the last 12 months by the rise in and the strength of the . It said on Wednesday that its net finance costs rose to more than £1.6 billion (£1=$1.2175), partly due to currency factors, but largely because of the sequence of Federal Reserve interest rate rises that have taken U.S. rates to their highest since 2008. That took net debt up to the top of its target range of two-to-three times earnings before interest, taxes, depreciation and amortization.
BAT said its new generation of nicotine products, such as vaping brands Vuse and glo, both continued to make gains, with the former reaching a market share of 35.7% in its core markets which include the U.S.
