Ahead of the Q1 2026 Earnings release
Date: April 22, 2026 (Wednesday), before the bell
Consensus: $9.88 billion revenue (+6.2% year-on-year); $1.83 EPS (+8.3% year-on-year)
PMI FY26 Guidance: Net revenue growth of 5%-7% and adjusted diluted EPS growth of 11.1%-13.1%. For Q1 2026, the company expects EPS in the range of $1.80-$1.85 (midpoint: $1.825), including an estimated favorable currency impact of $0.14. Consensus expectations are broadly aligned with guidance
Key Business Metrics: Q1 2026
– Adjusted net revenue: up +9.1% to $10.1 billion (vs. $9.88 billion expected; +%2.7 organic); smoke-free revenue up +12.4% (+5.3% organic)
– Adjusted diluted EPS: up +16% to $1.96 (vs. $1.83 expected; +5.3% ex-FX)
– Adjusted operating income margin: 41.1% (up +0.4pp vs. Q1 2025; driven by favorable FX; -0.7pp organic)
– Total volume: down -1.9% to 184.3billion (Heated tobacco volume: +11.3% to 41.3 billion; oral nicotine volume: -16.1% to 4.5billion; e-vapor volume: +94.8% to 1.2 billion; cigarette volume: -5.1% to 137.3 billion)
– Smoke-free weight: 43% by revenue; 25.5% by volume
Results Summary – International
– Smoke-free products (SFPs): 24.7% net revenue growth (15.8% organic), fueled by 11.9% volume growth. Gross profit growth of 28.6% (19.4% organic), reflecting the increasing profitability of the portfolio. IQOS remains the primary growth engine, with double-digit growth in both shipment volume and adjusted IMS. In SFP IMS growth, PMI (+11%) outpaces the industry (+8%) by ~3% and captures ~80% of the additional growth. Most recent launches include ZYN in Portugal and Kenya, VEEV in Egypt.
– Heat-not-burn: Available in 79 markets. c.77% category volume share. IQOS surpassed Marlboro and became the #1 nicotine brand in markets where present: share up +1.7pp to reach 10.9%. IMS volume up +10.9%, broadly in line with shipment volume growth of 11.3%. Broad based growth in terms of geographies and product lines. Excluding the impact of consumer pantry-loading in Japan ahead of the excise-driven price increase on April 1, adjusted IMS grew by an estimated +9.4%
In Japan, IQOS IMS is up +10.4%. IQOS holds close to 70% of heat-notburn category volume share. The overall heated tobacco category reached c.53% total nicotine national offtake. IQOS share in total nicotine increased by +2.7pp to a record 34.9% despite continued competitive intensity. Excluding the pantry-loading impact, adjusted IMS grew by an estimated +5.9%.
In Europe, IQOS IMS is up +5.4% and market share up by +1.1pp to 12.6% despite the ongoing disruptions in Ukraine and the initial impact of the characterizing flavor ban in Poland (implemented in January 2026). Growth led by strong performance in many markets, notably Italy, Greece, Germany, Spain and Serbia. Excluding markets where the characterizing flavor ban became effective in the last year, adjusted IMS volumes grew by around 8%.
Outside Europe and Japan, adjusted IMS is up by +19.4% and offtake share increased in key cities across the globe, including Mexico City, Jakarta, Riyadh, Kuala Lumpur and Seoul. In Taiwan, IQOS national offtake share reached almost 6% in March 2026, making it the most successful major launch market to date
– Modern oral nicotine: Modern oral volume growth (+7% to 0.5 billion pouches; +42% outside the Nordics), more than offset by snus declines in the Nordics, resulting in 5.1% volume decline. ZYN now available in 58 markets, outperforming the industry outside the Nordics, with notable offtake share gains in Pakistan, Poland and the UK. 1.5mg variants now available in over 80% of ZYN markets
– E-vapor: VEEV above 1 billion equivalent units for the first time. VEEV now shares the joint #1 position in closed pods in Europe with strong growth in Germany, France, Romania, Italy, Greece and Bulgaria
– Combustibles: Volume down -5.1% (against a strong Q1 2025). Industry decline -2.3%. Net revenue up +6.8% (+1.0% organic), driven by 8.5% pricing, partly offset by geographic mix. Gross profit up +9.8% (+3.9% organic). Overall cigarette category volume share down -0.6pp to 24.8% due to unfavorable market mix and lower share in Indonesia, Russia and Turkey, partly offset by gains in Egypt. Marlboro continued to gain share: up +0.4pp to a record first-quarter category share of 10.7%. FY26 pricing variance expectation: +6% (vs. +8.5% in Q1 2026)
Result Summary – USA
– ZYN offtake volume up +10% despite an uneven competitive landscape (i.e. no ZYN presence in the most dynamic strength and flavor segments). Volume/revenue/profit decline driven by de-stocking and a challenging promotional comparison. ZYN U.S. shipment volume down 23.5% to 155 million cans (2.3 billion pouches). U.S. share in global ZYN shipments: c.82%
– Preparing to launch ZYN ULTRA, which remains under active FDA review as part of the nicotine pouch pilot program, in the coming months
– ZYN U.S. shipment profile should closely follow the off-take growth in the coming quarters
– Total U.S. smoke-free shipment volume down 21.2% to 2.8 billion
FY26 Guidance
– Reported diluted EPS: $7.56 – $7.71 (before: $7.87 – $8.02)
– Adj. EPS: $8.36 – $8.51 (before: $8.38 – $8.53), representing an increase of 10.9% to 12.9% (unfavorable adjustments: upped from $0.51 to $0.80 per share)
– Adj. EPS, ex-FX: $8.11 to $8.26, representing an increase of 7.5% to 9.5% (favorable FX: reduced from $0.27 to $0.25 per share)
FY26 Assumptions
– Industry volume, ex-China&US: -2% (no change)
– PMI volume: Broadly stable, with high-single digit SFP shipment volume growth, and a cigarette shipment volume decline of c.3% (no change)
– Net revenue growth: 5% to 7% on an organic basis (no change)
– Operating income growth: 7% to 9% on an organic basis (no change)
– Broadly stable net financing costs; effective tax rate of around 21.5% (no change)
– Operating cash flow: c.$13.5 billion; CAPEX: $1.4 to $1.6 billion, predominantly due to investments supporting the smoke-free business (no change)
– Leverage: Further net debt to adjusted EBITDA ratio improvement with close to 2.0x targeted by the end of 2026 (at the end of 2025: 2.5x). No share repurchases
– Effective tax rate: 21.5%
– Q2 2026 EPS: $2.02-$2.07 (including 2¢ favorable FX)
Other Highlights
– The Middle East Conflict: Small impact in Q1 2026. Shipments to Global Travel Retail and certain markets in the region affected. Increased energy prices and some disruption in energy supply in a number of markets has not resulted in a discernible shift in consumer behavior so far. No prolonged impact factored into the FY26 forecast; some increases in transport, energy and other input costs factored in
Download PMI Q1 2026 – Press Release
Download PMI Q1 2026 – Presentation
Download PMI Q1 2026 – Script
