*

BAT profit growth helped by US growth for first time in 3

years

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Smokeless products a focus, make up over 18% of total

revenue

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CEO discusses tariff impact, strategies to absorb costs in

U.S.

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Expects full year revenue growth at top end of forecast

range

(Fixes formatting.)

July 31 (Reuters) - British American Tobacco ( BTI ) exceeded

first-half profit estimates on Thursday as its U.S. business

grew for the first time in three years, a potential turnaround

in its largest market as new tariffs are introduced and consumer

preferences shift.

BATS said it expects annual revenue growth to come

in at the top end of its forecast range.

The maker of Lucky Strike and Dunhill cigarettes said

revenue in the U.S., which makes up about 44% of total sales,

grew 3.7% at constant currency, with Velo, its nicotine pouches,

helping sales of its new category products grow 3.9%.

Its smokeless products, which include Velo, Vuse Ultra

premium vapour, and glo Hilo heated tobacco, make up more than

18% of total revenue.

BAT and peers such as Philip Morris ( PM ), Imperial Brands ( IMBBF )

, and Altria ( MO ) are trying to capture a bigger share

of the vapes, tobacco heating product and oral nicotine

pouches market as sales drop in traditional tobacco products.

While most of BAT's products sold in the U.S. are produced

locally, its Vuse vape devices are made in Indonesia, now

subject to a 19% tariff.

CEO Tadeu Marroco said at a news briefing that BAT had

front-loaded some stock to mitigate this in the short-term, but

would look to absorb most of the tariff via its profit margin,

adding that U.S.-produced liquids were a bigger part of its

business.

BAT would also be exposed to higher costs via items such as

packaging material, he said, though the impact of this was

"manageable" and the company was watching how consumers would be

affected by widespread tariff changes for the rest of the year.

It reported adjusted diluted earnings of 162 pence per share

for the six months to June 30, compared with 159.4 pence a year

ago, and a company-compiled consensus estimate of 154.8 pence.

The company said it was on track to achieve its 2025

financial forecast, with annual sales growth likely at the upper

end of its 1%-2% forecast range.