British American Tobacco (LSE:BATS) shares fell 1.7% on Tuesday after the company said it expects fiscal 2026 revenue and adjusted profit from operations growth to be towards the lower end of its existing guidance ranges.
BAT said it remains on track for revenue growth towards the lower end of its 3% to 5% range and adjusted profit from operations growth towards the lower end of its 4% to 6% range, both measured at constant exchange rates.
Adjusted diluted earnings per share growth is expected to be towards the middle of the company’s existing 5% to 8% range at constant rates.
The guidance was provided during BAT’s Capital Markets Day in Winston-Salem, North Carolina.
BAT Sets New Category Targets Through 2030
Chief Executive Tadeu Marroco and the management team also outlined the company’s Horizon 2030 objectives during the event.
BAT is targeting mid-teens revenue growth for its New Categories business through 2030.
The company expects the New Category contribution margin to reach at least 30% by 2030. BAT said its plans include a focus on premium products, changes in product mix, increased scale and more targeted allocation of resources.
The targets represent the company’s longer-term objectives and remain dependent on future business and market conditions.
Leverage Expected Within Target Range by Year-End
BAT said it expects leverage to be within its target range of 2.0 to 2.5 times by the end of the year.
The company also said it intends to continue returning cash to shareholders.
Based on current spot exchange rates, BAT expects foreign currency translation to reduce fiscal 2026 adjusted diluted EPS growth by approximately 2% to 2.5%.
The currency impact relates to the translation of results and is separate from the company’s constant-currency earnings guidance.
BAT Outlines Multi-Category Strategy
During the Capital Markets Day, BAT presented its strategy for its global multi-category portfolio.
The company highlighted consumer insights, scientific research and innovation, global distribution and retail networks, regulatory expertise and digital capabilities as areas supporting its strategy.
BAT’s Horizon 2030 plans include further development of its New Categories business alongside its broader portfolio, with the company setting targets for revenue growth and contribution margins through the end of the decade.
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