June 3 (Reuters) - British American Tobacco ( BTI )

said on Tuesday it would return to revenue and profit growth in

the U.S. this year, and inched up its annual sales growth target

to 1%-2%, with first-half revenue trending slightly ahead of its

expectations.

The maker of Lucky Strike and Dunhill cigarettes, which had

earlier forecast 1% sales growth this year, said it now expects

low-single digit revenue growth in the first half in its

business that includes vapes, tobacco heating products and oral

nicotine pouches.

BAT and its peers have been struggling with declining

tobacco sales as consumers switch to cheaper brands or

alternatives such as vapes, tightening regulations, and a

squeeze from illegal vapes.