The company saw the number of cigarettes sold increase 4.5 percent to to 9.46 billion in the fourth quarter, while its main rivals, Altria Group Inc., and Reynolds American Inc., saw declines. Lorillard benefited from a 2.2 percent increase from its flagship Newport brand and an increase of about 25 percent for its lower-priced Maverick brand.
The weak economy and high unemployment have caused some smokers to trade down to cheaper brands during the recession in a bid to save money. Lorillard's Maverick and Reynolds American's Pall Mall brands have been among the beneficiaries.
In a conference call with analysts Monday regarding his company's fourth-quarter earnings, CEO Murray S. Kessler discussed the company's Maverick brand.
QUESTION: How much more runway to do see for Maverick?
RESPONSE: Maverick is obviously still a very small share within discount and it benefits from two things. It benefits from the fact that it is good quality product that is recognized by consumers. The second things it benefits from is, based within our total share and narrow product line, it gets good visibility at retail. ... With good visibility and a great product at a great price, the brand has lots of running room.