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Investing.com -- Philip Morris International Inc (NYSE:PM) said U.S. supply constraints on ZYN nicotine pouches will normalize by the third quarter, while downplaying the potential impact of recently proposed tariffs. CFO Emmanuel Babeau said consumer demand remains strong and shipment growth should accelerate as inventory levels recover.
Philip Morris earlier posted a solid first-quarter report, topping analyst expectations and raising its full-year 2025 earnings guidance. Adjusted earnings per share came in at $1.69, ahead of the $1.60 consensus estimate. Revenue rose 5.8% year-over-year to $9.3 billion, beating expectations of $9.06 billion, bolstered by strong ZYN sales.
“We’re going to continue the replenishment in the second quarter, maybe part of the third quarter as well,” Babeau told analysts during the company’s first-quarter call. “We expect to be back to a normalized situation… no more material out-of-stock situation by Q3 2025.”
ZYN shipments rose 53% year-over-year in the first quarter, driven by continued demand and expanded production capacity. However, Babeau cautioned that Q1 shipment numbers understated actual consumer offtake due to distributor inventory depletion in the prior year.
“We had clearly consumer offtake in Q1, which was much, much stronger than our shipment,” he said. “It’s going to be a mix of continued strong growth and ongoing restocking, which distorts the shipment profile temporarily.”
PMI has raised its U.S. ZYN shipment forecast to 800–840 million cans for 2025, up from earlier expectations. The company said shipment growth should accelerate as trade inventories are replenished and consumer demand trends resume their typical visibility.
Separately, Babeau addressed macroeconomic concerns, including recent tariff proposals, with cautious optimism. “While the situation is volatile, we do not currently anticipate a material impact on our business from recently introduced or discussed tariffs,” he said.
PMI has invested heavily in its U.S. manufacturing capacity, including ongoing expansion at its Kentucky facility and a second plant under construction in Colorado. This domestic footprint may help cushion potential trade headwinds.
Smoke-free revenue overall rose more than 20%, with strong contributions from ZYN, IQOS, and e-vapor. The company reaffirmed guidance for 12%–14% shipment growth in smoke-free products and lifted its adjusted EBITDA and EPS forecasts.
With broad geographic diversification, resilient pricing, and expanding market share in non-combustible products, PMI noted its consistent ability to deliver growth despite global uncertainty. “Following an excellent start to the year, we are now on track for another year of strong performance,” Babeau said.