Lorillard to Benefit From Reduced Risk of a Menthol Ban: Smooth Yield, Smoking Return

Menthol flavored cigarettes account for nearly 30% of cigarette sales. The smoother taste of menthol has allowed menthol flavored cigarette sales to outgrow the boarder industry. Much of menthol's growth has come from new smokers who are turned on to the flavor. Lorillard (LO), the maker of the menthol-flavored Newports, has enjoyed this growth in the form of 6% revenue growth between fiscal year 2007 and 2008 and another 6% between 2008 and 2009. Catching this kind of revenue growth in this mature industry is impressive, to say the least. It also lead to a 12% increase in earnings per share between 2008 and 2009 fiscal years. Lorillard also enjoys the highest profit margin in the industry at 25.7% for fiscal year 2009.... Read more

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