British American Tobacco Turns Cautious on Guidance Despite U.S. Growth — Update

By Aimee Look and Cristina Gallardo

British American Tobacco forecast 2026 revenue and profit growth would be at the lower end of its midterm guidance, despite demand for vapor and other smokeless products continuing to rise last year.

The group, which houses the Camel and Lucky Strike brands, is turning to new products in the U.S. to boost growth, at a time when tobacco companies are finding new growth engines like pouches, where nicotine is absorbed through the lining of the mouth into the bloodstream.

Consumers are increasingly gravitating toward these alternative products, while celebrities have also reglamorized smoking cigarettes for younger users enticed by their retro allure.

British American Tobacco said Thursday that it expected its 2026 results to come in at the lower end of its midterm outlook--which calls for revenue growth of 3% to 5% and adjusted profit from operations rising by 4% to 6% when excluding currency movements--as it continues to invest in its transformation.

The FTSE 100 company had previously signaled regulatory and fiscal headwinds in Bangladesh and Australia would hurt its 2025 results, but said that it would perform within its midterm ambitions again in 2026.

Shares fell 2.4% to 43.20 pounds.

BAT posted a pretax profit for 2025 of 9.86 billion pounds ($13.44 billion) compared with 3.54 billion pounds in 2024, when its results were hit by a 6.2 billion-pound provision for a settlement of litigation in Canada.

Revenue for the group as a whole dropped 1% to 25.61 billion pounds due to a foreign exchange headwind, and was in line with a consensus estimate provided by the company of 25.60 billion pounds. Revenue was up 2.1% at constant currency.

New categories revenue rose to 3.62 billion pounds, up 7% at constant currencies. Revenue for the category returned to double-digit growth in the second half, driven by its nicotine pouch Velo brand across all regions. BAT said it has been pouring into improved R&D capabilities, which yielded launches like Vuse Ultra.

Adjusted profit from operations--one of the company's preferred metrics--came in at 11.89 billion pounds, against a consensus forecast of 11.29 billion pounds. The metric was up 2.3% at constant currency and excluding Canada.

The company's results in the U.S. boosted overall performance, as revenue grew 5.5%, RBC Europe analysts James Edwardes Jones and Wassachon Udomsilpa wrote in a note. Though new categories products like vapor and heated products are improving volumes, there might be a drag in margins, they add.

The board declared a dividend of 245.04 pence a share, up 2% on year.

Write to Aimee Look at aimee.look@wsj.com and Cristina Gallardo at cristina.gallardo@wsj.com

(END) Dow Jones Newswires

February 12, 2026 08:24 ET (13:24 GMT)