British American Tobacco said revenue from smoking alternatives will fall short of expectations this year, but earnings growth should beat its target as the maker of Lucky Strikes gains market share.

The company’s forecast to beat the goal of high-single-digit percentage growth in adjusted earnings per share may be overshadowed by BAT’s statement that revenue from alternatives to cigarettes will miss its £1 billion target by about £100 million.

While revenue from vaping is rising more than 10 per cent, the key market for heated-tobacco products in Japan has gone flat. The company said it's cutting back on stockpiles for year-end sales in that key market for the next-generation products.

Growth in traditional cigarettes is buoyed by higher prices, which will probably exceed the 5.5 percent increase of last year. Adverse currency shifts will probably reduce full-year earnings per share by about 7 per cent, BAT also said. The London-based tobacco company's shares have fallen 34 percent this year amid a selloff of cigarette makers. They are trading near their lowest level in more than four years.