British American Tobacco (BAT) shares plunged on Thursday after it reported underwhelming vape sales in the US and forecast a slowdown across the smoking industry this year.
So-called “new category” products like vapes and oral tobacco have been touted as the future of the sector, and BAT has said it wants to be a “predominantly smokeless” business by 2035.
Meanwhile, its US cigarette sales plunged 10.1%, as a fall in consumer spending pushed more people to buy discount products, rather than BAT’s premium ranges.
The maker of Camel and Lucky Strike cigarettes made 0.8% less in 2024 vape sales than the previous year in its key American market.
Russ Mould, an analyst at AJ Bell, said the smokeless pledge is “all very well… but it does beg the question of what’s going to replace the revenue and cash flow provided by selling cigarettes”.
