"Nicotine Nuggets" Q2 survey – Cautiously optimistic as cig volume declines moderate and nic pouches grow strongly

Research evidence excerpt

"Nicotine Nuggets" Q2 survey – Cautiously optimistic as cig volume declines moderate and nic pouches grow strongly

Equity Research

17 July 2026 | 12:00AM EDT

AMERICAS TOBACCO

“Nicotine Nuggets” Q2 survey – Cautiously optimistic as cig volume

declines moderate and nic pouches grow strongly

Our View - We’re slightly more optimistic on the U.S. tobacco/nicotine industry near Bonnie Herzog

+1(212)902-0490 |

term given moderating cig volume declines in Q2 and continued robust growth of the bonnie.herzog@gs.com

Goldman Sachs & Co. LLC

nicotine pouch category despite continued pressures on the tobacco consumer given

Ankit Prasadthe inflationary backdrop and higher gas prices. This is based on feedback from our +1(212)934-6394 |

retailer & wholesaler contacts in our Q2 “Nicotine Nuggets” survey representing ankit.prasad@gs.comGoldman Sachs India SPL

~31,000 retail locations across the U.S. (~19% of all tobacco outlets). In addition, Ethan Huntley

given strong strategic initiatives and positioning within smoke-free, we reiterate our +1(617)772-7940ethan.huntley@gs.com|

Buy ratings on PM and MO and expect both companies to report a Q2 beat and raise. Goldman Sachs & Co. LLC

VidgerKey takeaways from our survey include: (1) Cig volume declines moderated Nicholas | +1(212)934-0631

sequentially in Q2 but still pressured given persistent downtrading behavior away nicholas.vidger@gs.com Goldman Sachs & Co. LLC

from premium cigs to deep discount or to other product categories, such as nicotine

Shanika Paul

pouches, e-cigs or other alternatives. (2) The outlook remains cautious but retailers +1(212)902-7136 |

shanika.paul@gs.com

& wholesalers generally see the environment as stable despite ongoing concerns on Goldman Sachs & Co. LLC

the consumer and pressure from higher gas prices.