MO Q4 Deep Dive: Margin Compression and Smoke-Free Expansion Shape Outlook

Tobacco company Altria reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 14.5% year on year to $5.85 billion. Its non-GAAP profit of $1.30 per share was 1.3% below analysts’ consensus estimates.

Altria (MO) Q4 CY2025 Highlights:

• Revenue: $5.85 billion vs analyst estimates of $5.01 billion (14.5% year-on-year growth, 16.6% beat)
• Adjusted EPS: $1.30 vs analyst expectations of $1.32 (1.3% miss)
• Adjusted EPS guidance for the upcoming financial year 2026 is $5.64 at the midpoint, beating analyst estimates by 0.9%
• Operating Margin: 30%, down from 56.4% in the same quarter last year
• Market Capitalization: $106 billion

“2025 was a year of continued momentum for Altria, marked by strong financial performance, strategic progress across our smoke-free portfolio, new relationships in support of our long-term growth goals and significant cash returns to shareholders,” said Billy Gifford, Altria’s Chief Executive Officer.

Company Overview

Best known for its Marlboro brand of cigarettes, Altria offers tobacco and nicotine products.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $20.91 billion in revenue over the past 12 months, Altria is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have). However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To expand meaningfully, Altria likely needs to tweak its prices, innovate with new products, or enter new markets.

As you can see below, Altria struggled to increase demand as its $20.91 billion of sales for the trailing 12 months was close to its revenue three years ago. This shows demand was soft, a poor baseline for our analysis.

This quarter, Altria reported year-on-year revenue growth of 14.5%, and its $5.85 billion of revenue exceeded Wall Street’s estimates by 16.6%.

Looking ahead, sell-side analysts expect revenue to decline by 3.6% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and suggests its products will face some demand challenges. At least the company is tracking well in other measures of financial health.

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Cash Is King

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Altria has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the consumer staples sector, averaging an eye-popping 40.9% over the last two years.

Key Takeaways from Altria’s Q4 Results

We were impressed by how significantly Altria blew past analysts’ revenue expectations this quarter. We were also glad its gross margin outperformed Wall Street’s estimates. On the other hand, its EPS slightly missed. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 2.5% to $61.53 immediately after reporting.

Is Altria an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Altria and the best and worst performers in the beverages, alcohol, and tobacco industry.

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

The 14 beverages, alcohol, and tobacco stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 4.2% on average since the latest earnings results.

Weakest Q3: Altria

Best known for its Marlboro brand of cigarettes, Altria offers tobacco and nicotine products.

Altria reported revenues of $5.25 billion, down 1.7% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a slower quarter for the company with a significant miss of analysts’ gross margin estimates and a slight miss of analysts’ revenue estimates.

Unsurprisingly, the stock is down 1.2% since reporting and currently trades at $61.23.

Best Q3: Celsius

With its proprietary MetaPlus formula as the basis for key products, Celsius offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $725.1 million, up 173% year on year, outperforming analysts’ expectations by 1.2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Celsius achieved the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.8% since reporting. It currently trades at $56.53.

Molson Coors

Sporting an impressive roster of iconic beer brands, Molson Coors is a global brewing giant with a rich history dating back more than two centuries.

Molson Coors reported revenues of $2.97 billion, down 2.3% year on year, falling short of analysts’ expectations by 1.4%. It was a mixed quarter as it posted a decent beat of analysts’ gross margin estimates but a slight miss of analysts’ revenue estimates.

Molson Coors delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 15.7% since the results and currently trades at $50.02.

Read our full analysis of Molson Coors’s results here.

MGP Ingredients

Headquartered in Atchison, Kansas, MGP Ingredients is a leading supplier of high-quality ingredients to the food and beverage industry

MGP Ingredients reported revenues of $130.9 million, down 18.9% year on year. This result beat analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

MGP Ingredients had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is up 3.3% since reporting and currently trades at $24.45.

Read our full, actionable report on MGP Ingredients here, it’s free.

Keurig Dr Pepper

Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.

Keurig Dr Pepper reported revenues of $4.31 billion, up 10.7% year on year. This print topped analysts’ expectations by 3.8%. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts’ revenue estimates but a slight miss of analysts’ gross margin estimates.

The stock is up 3.1% since reporting and currently trades at $28.01.

Read our full, actionable report on Keurig Dr Pepper here, it’s free.

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the beverages, alcohol, and tobacco industry, including Vita Coco and its peers.

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

The 14 beverages, alcohol, and tobacco stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3.9% on average since the latest earnings results.

Vita Coco

Founded in 2004 followed by a 2021 IPO, The Vita Coco Company offers coconut water products that are a natural way to quench thirst.

Vita Coco reported revenues of $182.3 million, up 37.2% year on year. This print exceeded analysts’ expectations by 15.2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EBITDA estimates.

Vita Coco pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 23.6% since reporting and currently trades at $52.23.

We think Vita Coco is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: Celsius

With its proprietary MetaPlus formula as the basis for key products, Celsius offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $725.1 million, up 173% year on year, outperforming analysts’ expectations by 1.2%. The business had an exceptional quarter with a beat of analysts’ EPS and EBITDA estimates.

Celsius scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 11.6% since reporting. It currently trades at $53.60.

Weakest Q3: Altria

Best known for its Marlboro brand of cigarettes, Altria offers tobacco and nicotine products.

Altria reported revenues of $5.25 billion, down 1.7% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ gross margin estimates and a slight miss of analysts’ revenue estimates.

The stock is flat since the results and currently trades at $61.69.

Read our full analysis of Altria’s results here.

Keurig Dr Pepper

Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.

Keurig Dr Pepper reported revenues of $4.31 billion, up 10.7% year on year. This result surpassed analysts’ expectations by 3.8%. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ revenue estimates but a slight miss of analysts’ gross margin estimates.

The stock is up 2.8% since reporting and currently trades at $27.92.

Read our full, actionable report on Keurig Dr Pepper here, it’s free.

Zevia

With a primary focus on soda but also a presence in energy drinks and teas, Zevia is a better-for-you beverage company.

Zevia reported revenues of $40.84 million, up 12.3% year on year. This number topped analysts’ expectations by 3.7%. Overall, it was an exceptional quarter as it also logged EBITDA guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Zevia scored the highest full-year guidance raise among its peers. The stock is down 17.6% since reporting and currently trades at $1.95.

Read our full, actionable report on Zevia here, it’s free.

Altria currently trades at $57.49 per share and has shown little upside over the past six months, posting a small loss of 1.1%. The stock also fell short of the S&P 500’s 10.4% gain during that period.

Why Does Altria Spark Debate?

Best known for its Marlboro brand of cigarettes, Altria offers tobacco and nicotine products.

Two Things to Like:

1. Elite Gross Margin Powers Best-In-Class Business Model

All else equal, we prefer higher gross margins because they usually indicate that a company sells more differentiated products, has a stronger brand, and commands pricing power.

Altria has best-in-class unit economics for a consumer staples company, enabling it to invest in areas such as marketing and talent to grow its brand. As you can see below, it averaged an elite 70.9% gross margin over the last two years. That means Altria only paid its suppliers $29.09 for every $100 in revenue.

2. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Altria has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the consumer staples sector, averaging an eye-popping 43.6% over the last two years.

One Reason to be Careful:

Long-Term Revenue Growth Flatter Than a Pancake

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Altria struggled to consistently increase demand as its $20.17 billion of sales for the trailing 12 months was close to its revenue three years ago. This wasn’t a great result, but there are still things to like about Altria.

Final Judgment

Altria has huge potential even though it has some open questions. With its shares underperforming the market lately, the stock trades at 10.1× forward P/E (or $57.49 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how beverages, alcohol, and tobacco stocks fared in Q3, starting with Boston Beer .

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

The 15 beverages, alcohol, and tobacco stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Boston Beer

Known for its flavorful beverages challenging the status quo, Boston Beer is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.

Boston Beer reported revenues of $537.5 million, down 11.2% year on year. This print fell short of analysts’ expectations by 0.9%, but it was still a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.

“Our depletions declined by 3% in the third quarter as volumes were pressured across the beer industry” said Chairman, Founder and CEO Jim Koch.

Unsurprisingly, the stock is down 11.3% since reporting and currently trades at $194.80.

Best Q3: Celsius

With its proprietary MetaPlus formula as the basis for key products, Celsius offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $725.1 million, up 173% year on year, outperforming analysts’ expectations by 1.2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Celsius achieved the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 24.6% since reporting. It currently trades at $45.73.

Weakest Q3: Altria

Best known for its Marlboro brand of cigarettes, Altria offers tobacco and nicotine products.

Altria reported revenues of $5.25 billion, down 1.7% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ gross margin estimates and a slight miss of analysts’ revenue estimates.

As expected, the stock is down 6.9% since the results and currently trades at $57.69.

Read our full analysis of Altria’s results here.

Philip Morris

Founded in 1847, Philip Morris International manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.

Philip Morris reported revenues of $10.85 billion, up 9.4% year on year. This number surpassed analysts’ expectations by 2%. Zooming out, it was a satisfactory quarter as it also logged a decent beat of analysts’ revenue estimates but a slight miss of analysts’ EBITDA estimates.

The stock is up 1.9% since reporting and currently trades at $161.

Read our full, actionable report on Philip Morris here, it’s free for active Edge members.

Monster

Founded in 2002 as a natural soda and juice company, Monster Beverage is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.

Monster reported revenues of $2.20 billion, up 16.8% year on year. This print topped analysts’ expectations by 4.3%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 16.4% since reporting and currently trades at $77.21.

Read our full, actionable report on Monster here, it’s free for active Edge members.