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

The stock declined 3.8% following the earnings release as investors reacted negatively to signs of deceleration in key segments and a cautious outlook, particularly evidenced by slower growth and competitive pressures in key regions and categories.

Key Takeaways

• Group revenue increased 2.9% with adjusted profit from operations up 3.5%; however, growth showed signs of slowing into the second half.
• New categories revenue grew 18%, led by a 66% increase in Modern Oral, but vapour growth was uneven with heated product revenue down nearly 12% due to inventory and competitive pressures.
• Combustible volumes declined 4.7%, despite revenue growth of 2.1% driven by strong price/mix actions, offsetting volume declines and market exits in Cuba and Mozambique.
• The U.S. delivered an 8.5% revenue increase, supported by multi-category growth and rising profit, but value share and volume share declined amid heightened competitive activity.
• Management noted moderation in H2 growth due to non-recurrence of positive inventory movements and tougher year-ago comparators, reflecting a cautious outlook.