Philip Morris stock drops as sales of its ZYN product do not meet expectations

Due to disappointing shipments of its ZYN nicotine pouches, Philip Morris International (PMI), the manufacturer of Marlboro, missed revenue expectations for the second quarter on Tuesday.

Despite the company increasing its full-year profit forecast, shares of the largest tobacco maker globally by market capitalization dropped nearly 7% on the New York Stock Exchange.

PMI outpaced its rivals in the shift from conventional tobacco products to smoking alternatives like ZYN, which quickly became PMI’s flagship product and the leading item in the U.S. market.

CEO Jacek Olczak stated to Reuters that he aims for ZYN, which is growing internationally, to become the leading pouch brand like Marlboro was for cigarettes.

“I want to remain a leader,” he said, adding that in markets where the nicotine pouch category is less developed, this can be achieved in as little as a year or two.

Velo, produced by British American Tobacco, is the leading nicotine pouch brand internationally (excluding the U.S.).