PM · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

Philip Morris International Inc. · 2026-07-24 · Importance 54 · Surprise 40 · Contradicted

Consolidated gross profit increased 10.9% year over year to $14.564 billion for the six months ended June 30, 2026, raising gross profit growth above revenue growth. Gross profit excluding currency and acquisitions or divestitures increased 6.4%, driven primarily by favorable pricing that added $1.150 billion, partly offset by unfavorable volume/mix of $238 million and higher costs of $75 million. International Smoke-Free gross profit increased 22.6% to $5.400 billion year to date, reflecting higher HTU and e-vapor volumes and favorable HTU pricing. U.S. gross profit declined 27.9% to $1.296 billion, driven by lower revenue, unfavorable volume/mix, and $89 million of higher costs, including manufacturing costs associated with the U.S. footprint expansion.

Key facts

• For the six months ended June 30, 2026, adjusted gross profit was $14,564 million, up from $13,136 million in the comparable 2025 period (an increase of 10.9%). source
• For the three months ended June 30, 2026, gross profit was $7,659 million, an increase of 11.5% from $6,866 million in the comparable 2025 period. source
• Equity investments and securities net was a loss of $244 million in 2026 compared to income of $(581) million in 2025 for the six months ended June 30, primarily due to unfavorable fair value adjustments for equity security investments in India and Sri Lanka. source

Impact estimates