(Reuters) -British American Tobacco 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.