Billy Gifford
Chief Executive Officer at Altria Group
Thanks, Mac. Good morning and thank you for joining us. In the third quarter, Altria continued to balance maximizing profitability from our core tobacco businesses, with investing to realize that vision of responsibly leading the transition of adult smokers to a smoke-free future. Our tobacco businesses performed well against difficult year-over-year comparisons. And we're encouraged by the significant retail share growth from on! in the third quarter. We also continued to reward shareholders with a strong and growing dividend, and announced today the expansion of our share repurchase program to $3.5 billion.
Both Altria and the tobacco industry are evolving and with transformation comes opportunity. It also brings uncertainty and adversity, including the recently International Trade Commission decision related to IQOS. We knew our journey to a smoke-free future would not be easy, but our determined and talented employees have demonstrated they are up to the challenge. The pursuit of our vision is not based on a single brand or product platform.
Our vision is built on our understanding of tobacco consumers, our capabilities as a leading tobacco company and a portfolio of smoke-free brands and product formats. We've made progress through the performance of our current smoke-free portfolio and advancements in regulatory sciences, data analytics and a robust consumer engagement system. Our tobacco businesses remained strong and our vision keeps us focused and guides us forward. Let's now turn to our business results. Altria grew its third quarter adjusted diluted earnings per share 2.5%, despite a backdrop of challenging comparisons and unfavorable year-over-year trade inventory movement.
For the first nine months of the year, adjusted EPS grew 4.5%, primarily driven by the strong financial performance of our tobacco businesses and higher ABI adjusted earnings. Our smokable products segment continues to generate significant cash and return to shareholders -- to return to shareholders and fuel our vision. Third quarter adjusted operating company's income decreased 2.2%, reflecting the impact of trade inventory swings, but grew $2.6% to $7.9 billion for the first nine months, while Marlboro remained strong. The all-tobacco products segment continued to deliver robust profit margins, while Copenhagen maintained its leadership position.
In all nicotine pouches, we have accelerated investment behind Helix and believe that the on! portfolio is well-positioned in this fast-growing category. We're advancing the sophistication of our analytics across our companies. The Helix team uses this capability to evaluate the impact of promotional tools on tobacco consumers, and understand what actions effectively drive trial, repeat purchase and adoption. On! retail share of all tobacco increased a full share point sequentially, reaching 3 share points for the third quarter and nearly tripling since the end of last year.
These strong results were driven by increased smoker trial and repeat purchase from existing on! consumers. We're excited by the performance of the on! during the first nine months of the year, and believe consumer insights, disruptive retail executions, and consumer engagement will continue to fuel its growth. Last year, we submitted pre-market tobacco applications to the FDA for the entire on! portfolio. While the FDA has made substantial progress in reviewing millions of PMTAs they received our applications for on! are still pending.
A week ago, the FDA authorized the marketing of four of our all-nicotine products, Verve Discs and Verve Chews in the flavors of Green Mint and Blue Mint and determined that the marketing of these products is appropriate for the protection of public health. This is the first flavor product authorization issued by the FDA for newly deemed tobacco products. While our Verve products are not currently in market, we believe the learnings we gained from developing our Verve submission were critical in following compelling and timely submissions for on! which we completed in only nine months after closing the on! transaction. We're also actively working on modified risk tobacco product applications for on!
We believe an MRTP would be an impactful point of differentiation for the brand, and an important tool in educating and ultimately transitioning smokers to less harmful products. In the e-vapor we estimate that the total category volume increased 17% versus the year-ago period and increased 2% sequentially as a result of continued elevated levels of competitive activity. While we had hoped for clarity on the categories outlook as manufacturers received PMTA decisions, the future of e-vapor is still uncertain. For most of the leading e-vapor products, the applications are still pending, including those submitted by JUULs. Moving forward, we expect e-vapor buying trends to be influenced by regulatory activity, which has the potential to impact the degree across category movement. Recently, the CDC published an update from their National Youth Tobacco survey.
While caution is warranted when comparing results year-over-year due to the impact of the pandemic on the survey's methodology under age e-vapor use, including use of JUUL, shows, continued signs of decline. We're encouraged by the progress, but more still needs to be done and we remain committed to continuing our work to drive down underage use. Turning to Heated Tobacco, the IQOS team continues to refine its go-to-market approach for new and innovative products. Across the four states were IQOS is available, total Marlboro HeatSticks volume continued to grow with repeat purchase accounting for approximately 85% of sales. According to IQOS consumers, our IQOS experts program played a significant role in their repeat purchases. The program offers smokers personalized support and encouragement through consistent tailored engagements.
In the Northern Virginia lead market device penetrations, as a percent of the smoker population continued to exceed the performance of previous roll outs. In the last four weeks of the third quarter, Marlboro HeatSticks achieved a cigarette category retail share of 1.8% in Northern Virginia stores with distributions. As we mentioned earlier, the International Trade Commission recently imposed an importation ban, and issued cease and desist orders on IQOS, Marlboro HeatSticks, and infringing components. We're disappointed in this decision as IQOS is the only inhalable tobacco product to have received FDA authorization as a modified risk tobacco product.
The ITC's importation ban will make the product unavailable for all consumers who have switched to IQOS, reduced the options for over 20 million smokers looking for alternatives to cigarettes, and ultimately is detrimental to public health. We continue to believe the Plaintiffs patents are invalid and that IQOS does not infringe on those patents. The ITC's decision is currently under 60-day review by the administration's U.S. Trade Representative.
In the event that the administration does not reject the decision, we are preparing to comply with the order. We've been focused on our contingency plans surrounding sales and distribution and had been in communication with PMI on their domestic manufacturing plans. We view the ITC's decision as a frustrating obstacle, but we're not deterred from the work required to realize our vision. We remain committed to the Heated Tobacco category and believe it can play an important role in transitioning smokers to a smoke-free future.
Going forward, we expect to apply the knowledge and capabilities we gained from introducing and responsibly marketing a brand-new product category. For example, we've learned how to blend behavioral science, data insights, and consumer engagement to support smokers on their smoke-free journey. Leverage MRTPs to educate consumers on the benefits of reduced risk products, and established a robust post-market surveillance system as required to monitor FDA authorized products. I'm optimistic about the future for tobacco harm reduction in the U.S.
We have an unprecedented opportunity to lead the way in shifting millions of smokers away from cigarettes, if we follow the science and foster innovation with the support of reasonable regulation. Let's turn to our financial outlook. We are raising the lower end of our full year 2021 guidance and now expect to deliver adjusted diluted EPS in a range of $4.58 to $4.62. This range represents a growth rate of 5% to 6% from a $4.36 base in 2020. I'd also like to welcome Marje Connelly and Matt Davis to our Board of Directors as announced this morning. They bring significant combined expertise in operations, business strategy, consumer insights, and public policy, and will be tremendous assets as we pursue our vision.
I will now turn it over to Sal to provide more detail on the business environment and our results.
