2010 2Q On the Call: Reynolds American CEO Susan Ivey

Source from:  The Associated Press 07/26/2010

Reynolds American Inc., the second-biggest U.S. cigarette company, has aggressively promoted its Pall Mall brand in previous quarters as a longer-lasting, more affordable cigarette as smokers weather the weak economy and high unemployment. Pall Mall sales are growing modestly despite industrywide declines in cigarette volumes in the face of tax increases, smoking bans, health concerns and social stigma. The brand's second-quarter volume grew 9.7 percent even as the Winston-Salem, N.C., company's overall volume fell 9.5 percent. Reynolds American said Pall Mall gained 1.8 points of U.S. retail market share to hold 7 percent, despite cuts in promotions in the second quarter. In a conference call with analysts regarding the company's second-quarter earnings, CEO Susan M. Ivey discussed Pall Mall. QUESTION: Is there any change in how you're thinking about the brand's promotion and how to balance profits and performance? RESPONSE: The strength of the brand … in the value segment continues to play well in this economy. We continue to see, as the trial continues, about half the people who try the brand stay with it. We are obviously growing margins on Pall Mall. Enditem