PMI's Smoke-Free Surge
Philip Morris International Reports Strong Q2/H1 2026 Results, Boosted by Smoke-Free Product Growth
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Philip Morris International posted strong second-quarter results for 2026, with net revenues climbing 10.4% to $11.2 billion, according to Sault Star. Smoke-free product shipments rose 2.5%, driven largely by IQOS, while the company's full-year adjusted diluted earnings per share grew 15.2%.
Smoke-free products now make up roughly 58% of total net revenues, with PMI's smoke-free portfolio available in 109 markets worldwide. The results beat expectations, though a 3-cent currency hit trimmed the adjusted EPS gain to 13.6% on an ex-currency basis, Brantford Expositor reported.
Smoke-Free Products Now Drive More Than Half of Revenue
PMI's smoke-free segment is no longer a side story — it is the main one. The International Smoke-Free Segment grew 14.2% in the quarter, fueled by 8.0% volume growth, according to Cold Lake Sun. IQOS, PMI's flagship heated tobacco device, led the charge as the key driver of that expansion.
Gross profit rose 11.5% in the quarter. PMI credited strong pricing, larger scale, and a better product mix from smoke-free items. The company's smoke-free products are now sold in 109 markets, up from earlier in the year, County Market noted.
ZYN Nicotine Pouches Expand Into 60 Markets
ZYN, PMI's oral nicotine pouch brand, is now available in 60 markets. The brand is seeing growing volumes in key new markets including Pakistan, Poland, and the UK, according to Brantford Expositor. Nicotine pouches are a smokeless product that users place under their lip — no tobacco leaf, no smoke.
ZYN's global push reflects PMI's broader bet that oral nicotine will be a major growth engine outside the United States. The brand has already built a dominant position in the US market and is now replicating that playbook internationally, Cold Lake Sun reported.
Cigarette Sales Still Growing in Key Emerging Markets
Despite the company's smoke-free push, traditional cigarettes still make up about 42% of total net revenues. PMI's cigarette shipment volumes rose 1.1% in the quarter. Growth in Turkey, Indonesia, and Egypt helped offset declines in other markets, according to Sault Star.
The resilience of the combustible segment gives PMI a stable cash base to fund its smoke-free transition. Analysts have watched closely to see if cigarette volumes would fall faster than smoke-free products could replace them. So far, that gap is not widening, County Market reported.
Full-Year EPS Forecast Updated for Currency Headwinds Only
PMI updated its full-year 2026 adjusted diluted EPS forecast, but only to account for currency swings. The company raised its outlook after transactional currency effects came in better than expected, Brantford Expositor reported. On an ex-currency basis, adjusted EPS growth stands at 13.6% for the first half of the year.
The currency-only adjustment signals that PMI's underlying business is performing at or above plan. The company did not change its operational guidance, suggesting management sees no need to revise core assumptions about volume, pricing, or market share heading into the second half of 2026.
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