British American Tobacco p.l.c. Q2 2026 Earnings Recap

Shares declined 3.6% as investors reacted negatively to a cautious outlook and signs of deceleration, particularly in key segments like heated products and Vapour, despite some growth in New Categories and a disciplined cost focus.

Key Takeaways

• Group revenue rose 2.9%, with adjusted gross profit up 3.8% and adjusted operating profit increasing 3.5%, but growth is moderating.
• New Categories grew 18% overall, led by Modern Oral’s 66% surge, though Vapour revenue showed mixed results with only 5.3% growth in the U.S. contrasted by a 14% decline in AME due to regulatory headwinds.
• Heated Products revenue declined nearly 12% globally, notably impacted by competitive pressures and inventory movements in value segments.
• Combustible volumes fell 4.7%, partly offset by a 6.8% price/mix improvement; U.S. combustible revenue grew 5% while volume and value share softened amid intensified competition.
• Management expects second half growth to moderate, citing non-repeat of favorable inventory effects, stronger comparators, and cautious investment pacing.