London‑listed British American Tobacco saw its shares slip 3.2% as it revised down the outlook for traditional cigarette volumes. The company now projects a 2.5% decline in global cigarette sales this year, versus an earlier 2% drop estimate. The downgrade comes amid slower‑than‑expected recovery in Asia‑Pacific, the Middle East and Africa.

Despite robust revenue and profit from U.S. combustible products—cigarettes, cigars and pipe tobacco—the firm reported a dip in domestic market share as competition intensifies. Meanwhile, it nudged up its revenue growth expectations for smoking‑alternatives such as vapes, signalling a strategic shift toward higher‑margin non‑combustible segments.

Analysts see the revised volume forecast tightening earnings forecasts for the quarter, while the modest lift in alternative‑product revenue could cushion the impact of shrinking cigarette demand. Investors will watch the company’s ability to translate the vapes push into measurable market share gains as the industry pivots away from combustion.

The 3.2% share decline underscores market sensitivity to volume guidance. With cigarette volumes now expected to fall 2.5%, the firm’s total‑addressable market contracts, pressuring cash flow. However, the incremental revenue outlook for vaping products suggests a pathway to offset diminishing combustion sales, provided regulatory environments remain favorable.