Philip Morris’ Cigar Biz Lasted 178 Years… Zyn Killed It in Under Five

Well, ladies and gentlemen, it looks like Philip Morris is ready to stoke the flames of change… by putting out its cigar business. Yes, you read that right. The company behind Marlboro is considering selling off its $1 billion U.S. cigar business, as it shifts its focus to the smokeless future, namely its wildly popular Zyn nicotine pouches. 

If you’ve been living under a rock, Zyn is the brand that’s literally sucking the life out of Philip Morris’ cigar segment, which, according to Bloomberg, has been seeing a 22% drop in cigar shipments since Philip Morris acquired Swedish Match, the maker of Zyn.

To be honest, this isn’t exactly a shocking move. The U.S. cigar market has been, well, dying for some time. Sales of cigars dropped 23% in 2023, compared to the pandemic highs of 2021 when everyone was stuck at home puffing away like it was their last day on earth. As smoking rates decline across the board, Philip Morris has been searching for something that will light up its revenue charts. And then alas, they found Zyn (their knight in shining armor).

Speaking of Zyn, let’s talk about why Philip Morris is putting its eggs in that smoke-free basket. Since acquiring Swedish Match, the company’s been all-in on Zyn, which has been flying off the shelves faster than even Philip Morris thought was possible. In Q4 2024, Zyn’s sales jumped 46.2%, reaching 183.8 million cans. And as much as the company might love its cigars, it's clear moneymaker is now Zyn, with shipments expected to rise by 34% to 41% in 2025. 

Now, let’s talk numbers… if Philip Morris does decide to sell its cigar division, they’re hoping to reel in over $1 billion. A big chunk of change, no doubt, but when you’re looking at an industry that’s been on a steady decline and compared to the smokeless alternatives that are on fire, you can see why the company might be itching to get rid of it. 

So, what’s next for Philip Morris post-cigars? Well, it’s still got plenty of fuel in the tank. Smoke-free products like IQOS (the heated tobacco device) and Zyn now account for roughly 40% of total sales. Not bad for a company built on cigarettes. And with revenue climbing 7.3% in the latest earnings report, it looks like this shift is paying off.

Over the last six months, the company’s stock has climbed 23%, reflecting strong investor confidence (or at least a lack of better options). And more importantly, Bank of America just gave it a “Buy” rating. Oh, and compared to other stocks, Philip Morris isn’t getting obliterated by tariffs (yet… give it time).

Stocks.News has positions in Philip Morris and Bank of America mentioned in article.