Reynolds American Q2 Performance Highlights

Reynolds American Inc., the second-largest tobacco company in the US, reported July 22 that its Q2 earnings dropped 9.5 percent compared to the same period last year due to plant closings expenses and economic challenges.

Reynolds American Q2 Performance Highlights

RAI admitted that price increases in cigarette and smokeless tobacco segments and moist-snuff sale volume growth compensated the drops in cigarette volume.

The company sold 20.3 billion cigarettes during the Q2, which is 9.5% less than in 2009, in comparison to industry-wide decline of 7.1%. Despite the overall drop, major drive brands Pall Mall and Camel gained additional market share.

Cigarettes

R.J. Reynolds, RAI’s cigarette-making division, reported its flagship cigarette brands Camel and Pall Mall showed increases in market share and volume. Pall Mall volumes gained 9.7 percent, and its market share added 1.8% totaling 7.0%/ Camel added 0.3% to its market share which now accounts for 7.8 percent.

RJR showed an overall solid performance, reporting a 6.9% drop in the second quarter in comparison to industry-wide drop of 7.1%. Key brands Camel and Pall Mall both posted gains, and currently comprise more than 50% of the cigarette-maker’s total volume and market share. These two brands posted a combined market share of 14.8 percent, growing by 2.1% during the second quarter.

Camel gained 0.3 percentage points to its market share in comparison to the same period in 2009. Its market share now totals 7.8%. The brand’s menthol varieties, such as Camel Crush, won 0.5% in the second quarter to reach 1.8% market share. Overall, Camel keeps boosting its performance as a total tobacco product.

RJR second major brand Pall Mall showed a more than impressive performance, growing its total share to 7 percent, up by 1.8% from the same period a year ago, and 0.5 points from the first quarter of 2010.

Smokeless Snuff

American Snuff Co. Reynolds American’ smokeless tobacco manufacturer, reported that total earnings reached $182 million up from $169 million in 2009, with major brands Grizzly and Kodiak performing very well.

American Snuff introduced a new style of its flagship brand Grizzly, named Grizzly 1900 Long Cut, a classic long cut product which showed an impressive performance during the second quarter.

The company’s premium Kodiak snuff reported an increased volume, despite experiencing a slight drop in shipments and being severely out promoted by competitor brands.

In addition RAI launched Camel Dip, a premium moist-snuff product which also performed nicely.

Camel Snus and Dissolvables

Camel Snus, the innovative smokeless product gained market share too. RJR plans boosting its share even more by introducing new styles of Camel Snus, Robust and Winterchill, which will provide a bolder and more inmtense tobacco taste.

Camel Dissolvable tobacco products, Camel Orbs, Sticks and Strips, are also being on demand, as customers show increased interest in this smoke-free product.

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