Pall Mall Enjoys Strong Growth But Reynolds Sales Down

Source from:  Tobacco Reporter 04/26/2010

R. J. Reynolds' domestic cigarette volumes during the first quarter of this year, at 18.2 billion, were down by 2.5 per cent from those of the first three months of 2009, according to results announced by Reynolds American Inc (RAI) yesterday. Sales of growth brands grew 32.9 per cent to 9.1 billion, with Camel filter styles down 5.3 per cent to 4.7 billion but Pall Mall up 134.3 per cent to 4.4 billion. Sales of support brands fell by 21.0 per cent to 7.7 billion while sales of non-support brands fell by 33.1 per cent to 1.4 billion. Premium brand sales were down by 11.8 per cent to 10.3 billion but sales of value brands were up by 13.2 per cent to 7.9 billion. Reynolds estimated that total US industry sales fell by 2.4 per cent to 72.0 billion, with sales of premium cigarettes down 1.5 per cent to 51 billion and sales of value brands down 4.6 per cent to 21.1 billion. Reynolds' cigarette market share grew by 0.2 of a percentage point to 27.9 per cent, with Camel's share down by 0.5 of a percentage point to 7.1 per cent and Pall Mall's share up by 3.6 percentage points to 6.5 per cent. Meanwhile, American Snuff's moist snuff volumes during the first quarter of this year, at 85.7 million cans, were up by 12.2 per cent on those of the first three months of 2009. Sales of Grizzly increased by 11.7 per cent to 72.6 million cans, sales of Kodiak rose 12.0 per cent to 12.0 million cans and sales of other brands were up by 46.9 per cent to 1.2 million cans. American Snuff's share of the domestic market decreased by 0.7 of a percentage point to 28.1 per cent, with Grizzly's share down by 0.7 of a percentage point to 24.0 per cent and Kodiak's share unchanged at 3.8 per cent. RAI's reported earnings per share (EPS) during the first quarter of this year, at $0.28, were up from $0.03 during the first three months of last year. Adjusted EPS were up by 11 per cent to $1.11. "Reynolds American started the year well," said chairman, president and CEO, Susan M. Ivey. "We reported higher first-quarter earnings compared with the prior-year quarter and continued to demonstrate the fundamental strength of our operating companies' business strategies and brands. "It's important to note that first-quarter comparisons benefited from unusually low cigarette and moist-snuff shipment volume in last year's first quarter, as wholesalers and retailers significantly reduced inventories ahead of federal excise-tax increases that took effect last April. "We achieved these results in a challenging environment, marked by significant competitive promotional activity and product introductions in both the cigarette and moist-snuff categories. "In addition, consumer spending patterns continued to be affected by the ongoing impact of higher tobacco taxes and the weak economy. "Despite these circumstances, our companies maintained their focus on strategies that delivered solid performance. "Both of our reportable operating segments continued to make significant progress, with further growth in operating income and total cigarette market share at R.J. Reynolds, and double-digit moist-snuff volume gains at American Snuff Co." Ivey added that RAI's Santa Fe subsidiary had again delivered robust volume and earnings growth. Enditem