British American Tobacco (LSE:BATS) saw its shares fall more than 4% on Tuesday after the company cautioned that its 2026 growth is likely to come in at the bottom of its previously guided 3%–5% revenue range. The update pointed to softer trends in parts of its heated-tobacco portfolio and uneven performance across regions.

For the current year, BAT expects revenue and adjusted profit to increase by roughly 2%—figures broadly in line with Jefferies’ forecasts of around 2% organic revenue growth and 1.5%–2.5% adjusted operating profit expansion.

Jefferies noted that the company’s update supports existing full-year guidance for mid–single-digit growth in New Category revenue, slightly below the 7.5% analyst consensus. BAT said the New Category segment—covering heated-tobacco devices, vapour products, and nicotine pouches—is poised to accelerate to double-digit growth in the second half.

Jefferies added that performance in U.S. e-vapor improved thanks to “improved regulatory enforcement on illicit products.”

Chief executive Tadeu Marroco said the group remains “focused on establishing glo Hilo as a premium offering in the largest Heated Products profit pools,” referencing launches in Japan in September and Poland in October, with broader expansion anticipated in 2026.

Despite this, BAT reported that glo’s volume share in key markets slipped by 1.2 percentage points, including a 60-basis-point decline in the Americas excluding the United States.

The company’s U.S. business was a bright spot, recording its strongest performance with a 20-basis-point increase in value share and stable volume share. BAT highlighted rapid momentum from its Velo Plus nicotine pouch, which delivered a 920-basis-point jump in Modern Oral volume share in the U.S., where New Category operations remain on track for full-year profitability. Globally, Velo reached 15.9% volume share of Total Oral products and 31.8% in Modern Oral, rising 460 and 590 basis points respectively.

BAT also reported that its Vuse vape brand retained global leadership in tracked channels, with value share in top markets up 10 basis points. Full-year Vuse revenue is now expected to decline at a high-single-digit rate—an improvement from the 13% drop posted in the first half—supported by a strengthening U.S. e-vape market.

Performance varied sharply by region. The Americas excluding the U.S. delivered robust results, led by Brazil, Turkey and Mexico. Meanwhile, Asia-Pacific, the Middle East and Africa continued to face regulatory and fiscal pressures, particularly in Bangladesh and Pakistan. Jefferies described combustible-product sales as resilient in Europe and the Americas, though challenges persist in APMEA.

BAT expects a 3% foreign-exchange translation drag on adjusted operating profit, matching Jefferies’ projected 3% EBIT impact. Net finance costs are forecast at about £1.8 billion, and global cigarette volumes are expected to fall around 2% in 2025.

The company also announced plans for £1.3 billion in share buybacks for fiscal 2026, up from £1.1 billion previously.

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