Bonnie Herzog

Babeau tied held guidance to stepped-up US investment (broader portfolio, When it Clicks campaign, MRTP) but declined specifics on any price or promo action, citing competitive sensitivity.

Babeau flagged encouraging first two weeks of ZYN Ultra offtake and share gains but urged caution given the short window, and positioned 1.5mg as key to converting smokers.

CEO outlined H2 improvement drivers: normalizing comps on revenue per can, underlying shipment base, and innovation launches. Declined to specify innovation timing or comment on launching without FDA approval.

CEO emphasized IQOS brand differentiation and 75% category share as structural drivers. Highlighted Italy's return to double-digit growth post flavor ban and Taiwan's rapid adoption as proof of brand strength.

Olczak acknowledged volume impact from April and October excise steps but declined to detail pricing strategy, noting margin expansion may take longer than immediate but expressing confidence in eventual delivery.

Emmanuel confirmed same fundamental growth model with positive smoke-free mix and combustible resilience. Specific 2026 headwinds are Japan excise, US ZYN base comparison, and Turkey/India/Mexico combustible volume pressure.

Emmanuel attributed EPS guidance raise to favorable tax rate trends and better-than-expected interest costs, on top of the strong OI growth engine. Noted OI could still finish above 11%.

Emmanuel confirmed investment spans both ZYN commercial support and IQOS launch preparation, including team-building and state-level presence, with spending continuing into 2026.

Emmanuel declined to quantify new consumer conversion rate but confirmed early feedback is 'extremely positive' with 80% of free can recipients being smokers/vapers, indicating successful recruitment targeting.

Emmanuel confirmed full 360-degree restart of commercial activities: increased promotions (though still below competitors), advertising, point-of-sale activity, brand building, and smoker/vaper acquisition programs.

Emmanuel defended the full 800-840M can range, noting the 10-20M lower restocking is offset by ZYN's powerful restart at 36-37% offtake growth, with commercial activity restarting.

Emmanuel outlined gradual ZYN restocking through Q2-Q3, with normalized supply expected by Q3. Shipment profile will show accelerating growth reflecting both consumer offtake acceleration and replenishment.

Emmanuel highlighted ZYN US as best-in-class margin, IQOS scale benefits, 3% smoke-free pricing, and consistent IQOS gross margin improvement over 2-3 years. Smoke-free margin gap vs combustible expected to persist.

Emmanuel confirmed the gap between smoke-free and combustible margins could continue to expand, driven by both combustible improvement and rapid smoke-free progress.

Jacek outlined margin drivers including pricing, positive smoke-free mix, easing COGS headwinds, and IQOS device scale. US IQOS ILUMA expected 2-3 years to net positive contribution.

Newman named both components, credit application timing and product staging, and reaffirmed a more balanced Q3/Q4 benefit.

Mancuso broke the decline into secular, elasticity and cross-category buckets and acknowledged Basic comps will be lapped, while declining to forecast volumes.

Sal framed Cowboy Cut as an RGM tool offering price-sensitive Marlboro consumers an option, with distribution expanding later in Q2.

Sal confirmed export volume and duty drawback benefits build through the year, but balanced 1H/2H growth is driven mainly by cross-category moderation.

Billy attributed Q4 share drop partly to enforcement reducing illicit vape availability, pushing dual-use consumers back to cigarettes where they chose discount. Analytics show Basic is not cannibalizing Marlboro.

Billy firmly separated Basic and duty drawback strategies. Basic targets approximately 30,000 stores where consumers face severe economic pressure. It captures consumers before they go to deep discount.

Billy highlighted on! was raising prices while category dropped 7% nationally and over 70% at one major retailer. Pleased with retail takeaway stability. Too early on on! PLUS.

Billy outlined three-pronged partnership: international modern oral expansion with LOOP, U.S. non-nicotine through Korean red ginseng, and manufacturing efficiencies enabling duty drawback.

Billy reaffirmed mid-single digit CAGR goal. Noted consumer under strain but making disciplined moves. Consumers adjusting if conditions stay stagnant.

Billy framed Basic repositioning as cyclical rotation of discount brands. Data analytics enable targeted approach in approximately 30,000 stores. Finds it cheaper to keep consumers in portfolio.

Billy explained national price gap metric was causing confusion since business is managed at store level. Marlboro Black in some stores had price gap as low as 5%.

Billy reiterated long-term profitability strategy. Emphasized strength of Marlboro, RGM tools for consumer relief, and monitoring of tariff impacts on consumers.

Sal confirmed multiple scenarios were modeled but did not explicitly address whether NJOY ACE removal could boost the high end of guidance.

Billy outlined multiple pathways including USTR review and SE exemptions for three patents. Emphasized discipline on settlement given pod segment declining roughly 15%.

Steve broke down the 8% OpEx increase: about 1pt employee expense, 2pts same-store operations, 2pts new units and 1.5pts credit card fees, and reaffirmed growing OpEx slower than EBITDA long term.

Steve grounded the 8-10% EBITDA guide in a roughly even split between mothership margin/velocity gains and new-unit contribution.

Darren confirmed on track for 80 stores and 500 over 3-year plan (originally 350, raised to 500). Sustainable algorithm is ~4% unit growth per year. NTI pipeline extends to FY28-29. Pulled back this year deliberately for CEFCO integration.

Darren said no change to M&A strategy. Small tuck-in deals normal course with dedicated team. Larger deals opportunistic. High bar on asset quality (must accommodate kitchens). Will say no to more than they say yes to.

Steve said purely mechanical: Fikes now in prior year base, so year-over-year growth rate steps down. No change in expectations for mothership or Fikes performance. Just math of comping a higher base.

Steve noted majority of promotions (BOGOs etc.) are vendor-funded and don't show directly in financials. Absolute promo level up with more stores, but company's direct spend not quantified.

Darren and Steve declined to comment on internal expectations or guidance conservatism, reiterating they will update at Q2. Steve reminded that Fikes comping effects make H1/H2 total growth look different.

Darren cited softer Q1 start plus February weather/leap day (-300bp to Feb comps). March came back at 3.7%, April at 5%, May in guidance range. Illicit vape hurting vape category but offset by nicotine alternatives up 54%.

Darren noted Casey's sells basic daily needs at low price points, offers QSR trade-down on food without quality sacrifice, and has not increased promotional spend but is more targeted.

Darren said consumer trends directionally unchanged, lower income consumers still soft but 75% of customers shopping normally at same frequency.

Steve confirmed November at 4% (midpoint of guidance), traffic was positive in Q2, and Q4 leap day lap is already factored in. No need to change range.

Laguarta defended the portfolio (portion-control and permissible platforms) and left room for tuck-in M&A, but did not address SKU rationalization directly.

Laguarta reframed to company-wide 7% H1 revenue and volume gains, credited affordability plus permissible/portion-control, but flagged H2 ROI optimization on pricing investments.

Ramon attributed volume pressure to the case-pack-water third-party transition with only 1 more month to lap, and pointed to the 9% total business growth including new platforms.

Steve acknowledged the prior-year comp issue but pivoted to managing margin at the total company level, emphasizing flexibility rather than committing to segment-level margin expansion.

Steve said investments manageable and funded by Q4 productivity carryover; Ramon added it's surgical, tested at scale in key markets since Q2 last year with very good ROI.

Ravi Pamnani answered, explaining beverages grew volume ex-case pack water; food volume impacted by promo strategy shift from deep single-brand to everyday low value across all brands. Service levels now at 97-98%.

Jamie detailed plant closures, line shutdowns, workforce rightsizing, procurement savings from ERP, and operating model changes. Ramon framed as multi-year productivity across standalone, NA integration, and global capability centers.

Ramon described three-pillar strategy executing as planned: value investments showing early returns in dual-size single serve and 10-count multi-packs, portfolio transformation, and operational excellence.

Ramon acknowledged caution due to geopolitical volatility; Jamie added 3pt FX headwind and higher below-the-line costs from debt and pensions as factors compressing EPS leverage.

Hankinson cited $530 million repurchased year-to-date and $2.5 billion remaining, promising programmatic and opportunistic buybacks but no specific pace.

Hankinson attributed maintained guidance to low macro visibility and gas-price volatility, not specific shipment headwinds.

Garth cited Veracruz fixed cost absorption as primary margin headwind, plus SG&A increase from lower FY26 incentive comp baseline and incremental marketing investment. Offset by 1-2% pricing (lower end), cost savings, and aluminum tariff relief.

Garth cited Q3 margin tailwinds: cost savings, pricing actions, depreciation timing benefit. Q4 headwinds: lowest seasonal quarter (20% of volume), depreciation reversal, rising aluminum tariff impact, and expense timing shift from Q3 to Q4.

Garth detailed H2 headwinds: 100bps fixed costs, 60bps incremental margin pressure, partially offset by lower comp and benefits. H2 always lower margin due to seasonality and brewery maintenance.

Garth noted rebuild creates beer occasions through construction jobs, confirmed tailwind is built into guidance. Joe Suarez tempered by noting California construction employment still down YoY and Hispanic unemployment elevated.

Bill expects beer category flat to -2%, with STZ continuing to gain significant share. Garth reiterated 39-40% beer margin framework unchanged, citing modular CapEx, cost savings, 1-2% pricing offsetting inflation and tariffs.

Bill cited high volatility vs historical trends as reason for wider range, noted California fire impact already factored into guidance.

Bill highlighted double-digit shelf gains in spring resets and increased marketing investment funded by above-plan cost savings.

Luc attributed the wide EPS range to gross-margin sensitivity and cost/commodity timing rather than giving explicit bottom/top scenarios.

Linda said strategy is doubling down on innovation (Glad Leakguard, full Litter relaunch) rather than purely promotional. Being disciplined on price promotion, consumers don't use more trash bags at lower prices. Short-term selective investment while maintaining long-term category value. Holistic margin management funds investments. Last 12 months not best performance but right plans moving forward.

Luc said wide range deliberate for agility. High end requires: categories at 1%+, great innovation execution, no supply disruptions. ERP inventory estimate finalized at 7.5pts (from 7-8 range). Feels good about retailer inventory positioning at end of Q1.

Linda said no material ERP segment difference except international (lower due to export size). Kingsford underperformed due to execution: less merchandising on wrong sizes for Memorial Day, not a price gap issue. Adjusted for July 4, saw improvement. Making further adjustments for Labor Day.

Luc said retailers building 1.5 weeks of inventory. 1-2 days variability equals 1-2 points of growth. Vast majority of reversal in Q1 FY2026. Linda added retailers committed to pre-build regardless of demand environment to avoid consumer out-of-stocks.

Kevin said tariffs not baked into outlook. Short supply chains, near-shored/on-shored production over recent years reduces exposure. Already taken actions to minimize. Very dynamic environment.

Linda said this is standard for any ERP transition. Built retailer inventories to cover system shutdown/bring-up period. Well within normal benchmarks from peers. Goal is zero consumer impact.

Linda rejected prisoner's dilemma concern. Said Litter has natural category tailwinds and innovation historically reinvents the category. Current promo is strategic and temporary.