Sales And Profits Down In First Quarter At Scandinavian Tobacco Group
Scandinavian Tobacco Group A/S, the company behind such popular brands as Macanudo, CAO and La Gloria Cubana, reported slightly lower sales and significantly lower profits for the first quarter of 2024. Net sales were down 0.7 percent, to 1,948 million Danish kroner ($279.8 million), compared to 1,963 million kroner ($281.9 million) in the first quarter of 2023.
Net profits for the quarter were 125 million kroner ($17.9 million), less than half the 260 million kroner ($37.3 million) reported for the first quarter of 2023.
STG has a variety of businesses, among them cigars. The company said it had double-digit declines in both its machine-made cigar segment as well as in pipe tobacco for the first quarter, but its handmade brands—which include the newly acquired Alec Bradley line—performed well in the quarter, and accounted for some 37 percent of revenues. STG made particular note of how handmade cigars were faring in markets outside of the United States.
“International sales of handmade cigars delivered double-digit growth in net sales,” the company wrote in its report. “The expansion of the handmade cigar business outside the U.S. remains a high priority and further expansion of consumer touchpoints will contribute to this growth.”
The cigar retail business is also a vital element to STG, which owns Cigars International. The company is the largest retailer of cigars in the United States, with a massive online presence, but it’s also expanding its brick-and-mortar footprint. Two Texas Cigars International superstores opened in 2023, pushing the countrywide total to nine, with three more expected to open in the second half of this year.
“The retail stores are delivering valuable contributions to the Group´s financial performance,” STG wrote in its report, and “have become an important part of the group’s net sales and growth.”
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