Finance
BAT forecasts low 2026 growth as vape competition, regulation weigh
Published by Global Banking and Finance Review
Posted on December 9, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 9, 2025
2 min readLast updated: January 20, 2026
BAT forecasts lower 2026 growth due to vape market challenges and regulatory pressures, despite plans for a 2025 share buyback.
Dec 9 (Reuters) - British American Tobacco said on Tuesday it expects its 2026 results to scrape the lower end of its mid-term targets as pressure from regulation and competition in the U.S. vape market erode strong growth elsewhere in its portfolio.
Shares of the company sank more than 4% in morning trading, after earlier dropping nearly 5%.
The maker of Lucky Strike and Dunhill, however, said it was on track to deliver its 2025 goals and plans to buy back shares worth 1.3 billion pounds next year.
BAT's biggest challenge in recent years has been booming U.S. sales of unregulated vape products, largely from China, which have dented profits in the $22 billion U.S. market for smoking alternatives.
CEO Tadeu Marroco said early benefits from stronger enforcement against unregulated vapes meant he did not expect its U.S. vape business to drag on its broader portfolio of smoking alternatives next year, which include fast-growing nicotine pouch brand Velo.
However, he said some 70% of the U.S. vape market was still made up of unregulated products, and it was not clear when it would become a growth engine.
"I'm trying to be cautious for 2026," he said.
CHALLENGES WEIGH ON MID-TERM GOALS
Marroco also flagged other challenges for next year, including the impact of stricter tobacco regulations in Australia. Investments in growing newer product categories would also weigh on profit growth, he said.
BAT expects its 2026 revenue at the lower end of its stated mid-term aim of 3% to 5% and growth in adjusted profit from operations of between 4% and 6%.
The company expects about 2% growth in revenue and adjusted profit from operations this year, with new-category revenue growth accelerating to double-digits in the second half, driven partly by demand for nicotine pouches and improving U.S. vape performance.
"This is perhaps not quite what the share price needed" after a strong performance year-to-date, Rae Maile, analyst at Panmure Liberum, said in a note.
Analysts, on average, expected total revenue growth of 2.1% for 2025, per a company-compiled poll.
($1 = 0.7502 pounds)
(Reporting by Yamini Kalia in Bengaluru and Emma Rumney in London; Editing by Sumana Nandy and Bernadette Baum)
A share buyback is when a company purchases its own shares from the marketplace, reducing the number of outstanding shares. This can increase the value of remaining shares and is often used to return capital to shareholders.
Revenue growth refers to the increase in a company's sales over a specific period. It is a key indicator of business performance and can result from higher sales volume, price increases, or new product offerings.
Adjusted profit from operations is a financial metric that reflects a company's profitability by excluding certain non-recurring items, providing a clearer picture of operational performance and ongoing profitability.
Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying the share price by the total number of shares. It is used to assess a company's size and investment potential.
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