Philip Morris International: Blasphemy

“We have three powerful growth drivers, with pricing power and positive smoke-free category mix on top of volume growth, where we target our fifth consecutive year of expansion led by IQOS, ZYN & VEEV. As we continue to invest strongly behind our 13 smoke-free brands, these drivers are also profit-accretive, and combined with our proactive measures on pricing and cost, we have great confidence in sustainable adjusted diluted EPS growth in both currency-neutral and dollar terms.” - Emmanuel Babeau PMI CFO, Q1 2025 Remarks

It was just in January that I waxed on about persistent FX pressures plaguing Philip Morris International, stating that the most easily understood way future returns become depressed is a mightier U.S. dollar. It is naturally understood that the inverse—a weakening dollar—would benefit the group. While the move has not been as great as some portray, the dollar has indeed weakened, prompting the company to raise full-year expectations.

With little interest in the often noisy year-by-year currency movements and a limited ability to understand grander macroeconomics, I remain focused on what is happening within the industry and under the company’s hood. Fortunately, there remain many positives to highlight. But first, there are concerns affecting ZYN’s U.S. presence worth addressing immediately. I will apply the same disproportionate focus that the market generally provides, but there is a good chance you will feel inclined to label what I have to say as blasphemy.

The Blasphemy of Niobe from Scenes from the Story of Diana, Related to engravings by Etienne Delaune (French, Orléans 1518/19–1583 Strasbourg), Possibly woven in the workshop directed by Pierre Blasse the Younger (French, active 1540–60), 183"x115’', 1547–1559