Philip Morris International

PMI has demonstrated consistent pricing above inflation in combustibles and rising unit economics in smoke‑free.

Q2–Q3 2025 results showed high‑single‑digit combustible pricing and double‑digit smoke‑free growth with gross margin expansion to the high‑60s and adjusted operating margins above 40%, evidencing the ability to pass on cost and monetize brand power.

The ZYN portfolio had a tactical U.S. promotional relaunch as supply normalized, but management reiterated best‑in‑class profitability for U.S. ZYN. As smoke‑free mix rises, structural margins should expand through consumables scale, manufacturing learning curves, and portfolio optimization (e.g., ILUMA).

Regulatory and tax steps (Germany’s surcharge; potential flavor/nicotine caps) can temper realized pricing, yet the combination of brand equity, addiction‑driven demand, and authorization barriers confers notable latent pricing power.